Dr Vidhu Sekhar P
India and Oman arrived at a historic Comprehensive Economic Partnership Agreement (CEPA), which was signed by Prime Minister Narendra Modi and Sultan of Oman Haitham bin Tariq signed on 18th December 2025, the agreement came into effect on 1st June 2026.
As per the agreement 99.38% of India’s exports by value, covering 98.08% of Oman’s tariff lines, get zero duty immediately. Earlier only 15.33% was duty-free under the Most Favoured Nation category. The sectors that will benefit include Textiles, leather, footwear, gems & jewellery, plastics, marine products, engineering goods, pharmaceuticals, medical devices, automobiles, sports goods, agri & processed foods.
We offer concessions on 77.79% of tariff lines, covering 94.81% of imports from Oman by value. Sensitive items like dates, marble, petrochemicals under Tariff Rate Quota-based liberalization. Zero duty on up to 2,000 tonnes Omani dates/year. However, sensitive items like gold/silver bullion, jewellery, Dairy, cereals, fruits, vegetables, edible oils, oilseeds, rubber, and spices are outside the purview to protect the domestic sector.
The bilateral trade between has risen from $10.61 billion to $11.18 billion in FY 2025-26. India exports were $4.02B and imported goods worth $7.16B. They are the 2nd largest trading partner in the Gulf region. This agreement is a strategic move to the GCC gateway and East Africa via ports of Sohar, Duqm and Salalah. In the geopolitical angle, Oman coastline lies outside the Strait of Hormuz. When it was blocked the trade from Oman jumped 246% as per data. This is widely seen as a reliable energy and trade gateway Investment during geopolitical uncertainties.
The export is expected to get a boost of $2-3B in the next 2 years. This will support MSMEs and the labour intensive sectors like textiles, women artisans,farmers, and fishermen. The deal helps de-risk exports amid US tariff tensions that are troubling the entire global trade.
There are apprehensions too due to the limited size of Oman’s population of 5 million and a GDP of $115B. The sustained growth will depend on quality upgrades in Oman’s relatively small market. Industry suspects Chinese goods routing via Oman. This needs to be addressed with a very tight rule of Origin(RoO) especially when it comes to sensitive goods.
The Comprehensive Economic Partnership Agreement (CEPA) is broader than the Free Trade Agreement (FTA) that- covers goods, services, investment, IPR, customs, dispute settlement, and professional mobility. This is our 5th major trade deal since 2014 after Mauritius, UAE, Australia,and European Free Trade Association(EFTA), one that could help reduce dependence on Western-dominated trade. (Author is Assistant Professor at National Institute of Fashion Technology, Daman Campus)
