In a major boost to India’s economic engagement with the Gulf region, the Republic of India and the Sultanate of Oman formally signed a Comprehensive Economic Partnership Agreement (CEPA) on 18 December 2025, marking a watershed moment in bilateral relations. The pact was inked in Muscat in the presence of Prime Minister Narendra Modi and the Omani leadership, following extensive negotiations spanning nearly two years.
This is Oman’s first bilateral trade pact since its 2006 agreement with the United States and aims to dramatically expand trade, services, investment, and professional mobility between the two friendly nations. India secured zero-duty access on over 98% of Oman’s tariff lines, covering almost 99.4% of Indian exports by value, while offering liberalisation on about 78% of its own tariff lines for Omani imports.
Under the CEPA, key Indian sectors such as textiles, gems and jewellery, pharmaceuticals, engineering goods, leather, and footwear will gain a competitive advantage in the Omani market through the immediate elimination of duties. The pact also promotes deeper services trade, foreign investment, and improved ease of doing business, positioning Oman as a strategic gateway for Indian firms into the wider Middle East and African economic corridors.
India–Oman trade has been steadily rising in recent years, reaching over USD 10 billion in 2024–25, with India exporting goods worth roughly USD 4 billion and importing about USD 6.5 billion. The CEPA is expected to accelerate this growth, enhance supply-chain integration, and support micro, small, and medium enterprises (msmes) across sectors.
Beyond goods, the agreement breaks new ground in professional mobility, easing entry and stay conditions for Indian professionals and raising quotas for corporate and contract service providers marking a significant step for the Indian services industry. It also opens the door for 100% foreign direct investment (FDI) by Indian companies in select Omani service sectors.
Indian policymakers played a crucial role in crafting a deal that balances trade liberalisation with the protection of domestic interests. The negotiations reflected India’s broader strategic shift towards diversifying trade partnerships amid global tariff challenges, particularly high barriers in major markets. The government’s proactive stance including Cabinet approval, diplomatic engagement, and alignment with India’s Gulf strategy facilitated a unified framework that elevates bilateral cooperation beyond hydrocarbons to manufacturing, services, investment, and people-to-people mobility.
India views the CEPA not only as an economic milestone but also as a strategic consolidation of its presence in the Gulf, strengthening resilient trade links and reinforcing India’s role in the region’s evolving economic architecture. It will also contribute significantly to employment generation and long-term economic development.
