India-Oman Comprehensive Economic Partnership Agreement (CEPA) 2025
Signed on December 18, 2025, this landmark agreement marks Oman's first bilateral FTA in nearly two decades and opens unprecedented market access for Indian businesses across goods, services, and traditional medicine sectors.
Executive Summary
Agreement Highlights
The India-Oman CEPA represents a strategic milestone in bilateral trade relations, with implementation expected by March 2026. This comprehensive agreement creates near-universal market access while strategically protecting sensitive sectors.
Oman's Commitment
98.08% of tariff lines covering 99.38% of Indian exports by value receive immediate duty-free access
India's Commitment
77.79% of tariff lines liberalized, strategically protecting sensitive agricultural and manufacturing sectors
💼 Services
Comprehensive liberalization across 127 sub-sectors including IT, business services, education, healthcare, and professional services
🏆 Historic Achievements
First country to access Oman's marble blocks (banned since 2019); first-ever comprehensive commitment on Traditional Medicine
📈 Current Trade
$10.61 billion (FY2024-25, up 18.6% YoY)
🎯 Export Target
$6 billion within 3 years (50% increase from current $4 billion)
Strategic Importance: This agreement strengthens India's economic engagement with the Gulf Cooperation Council (GCC) region, diversifies trade partnerships beyond traditional markets, and creates opportunities for MSMEs, artisans, and start-ups through reduced compliance costs and enhanced market access.
Market Access in Goods: Unprecedented Opportunities
Oman's Liberalization Commitment
Historic Breakthrough: Marble Blocks Access
India becomes the first country to gain access to Oman's raw marble blocks, banned from export since 2019. This directly addresses India's heavy dependence on Turkish marble imports (~13 lakh metric tons annually) and creates a strategic alternative supply chain for India's vibrant marble processing industry, particularly benefiting Rajasthan-based manufacturers.
India's Liberalization Framework
India commits to liberalizing 77.79% of tariff lines through immediate elimination, staged reduction, and tariff-rate quotas. This strategic approach ensures benefits flow to competitive sectors while protecting sensitive domestic industries.
Immediate Elimination
Zero tariffs from implementation date across agreed categories - instant market access for Omani exporters in non-sensitive sectors
Staged Reduction
Gradual tariff phase-down providing adjustment period for domestic industries to enhance competitiveness and adapt to competition
Tariff-Rate Quotas
Controlled liberalization for marbles and select petrochemicals - lower tariffs within quota limits, normal tariffs beyond
Services Liberalization: High-Value Opportunities
Oman's commitments across 127 sub-sectors create transformative opportunities for Indian service providers, with enhanced market access, regulatory certainty, and professional mobility.
High-Value Service Sectors
| Sector | Key Sub-Sectors | Oman's Commitment Level | Strategic Significance |
|---|---|---|---|
| Information Technology | Software development, IT consulting, cloud services, cybersecurity, data analytics | High: Mode 1, Mode 3, Mode 4 access with minimal restrictions | Leverages India's global IT leadership; enables digital transformation partnerships |
| Business Services | Management consulting, accounting, legal, architecture, engineering | Comprehensive: Full Mode 1, Mode 3 access; Mode 4 for qualified professionals | Supports Oman's Vision 2040 economic diversification through expertise transfer |
| Education Services | Higher education institutions, vocational training, online education platforms | Substantial: Foreign branch campuses, joint ventures, online delivery | Addresses Oman's growing demand for quality education and skills development |
| Healthcare Services | Hospital services, specialty clinics, telemedicine, medical tourism | High: Foreign investment in healthcare facilities, telemedicine delivery | India's competitive healthcare sector meets Oman's infrastructure expansion needs |
| Financial Services | Banking, insurance, fintech platforms | Moderate: Subject to Oman's regulatory framework with gradual opening | Enables participation in Oman's financial sector modernization |
| Construction & Engineering | Infrastructure development, project management, specialized engineering | High: Contract-based service delivery, temporary movement of personnel | Indian firms can participate in Oman's major infrastructure projects |
| Tourism & Hospitality | Hotel management, travel services, heritage tourism | Substantial: Foreign investment, franchise operations | Mutual tourism promotion and hospitality sector collaboration |
| Traditional Medicine (AYUSH) | Ayurveda, Yoga, Unani, Siddha, Homeopathy, Naturopathy | Historic First: Comprehensive commitment including practice, education, products | First-ever international agreement recognizing Traditional Medicine as distinct sector |
📱 Scroll horizontally to view all columns →
Breakthrough in Traditional Medicine
The India-Oman CEPA includes the world's first comprehensive commitment on Traditional Medicine systems (AYUSH). This unprecedented provision enables Indian practitioners to establish clinics in Oman, permits marketing of AYUSH products, allows educational institutions to operate, and creates regulatory pathways for traditional medicine practice. This opens entirely new export avenues for India's $18+ billion wellness and traditional medicine sector.
Professional Mobility & Investment
Intra-Corporate Transferees (ICT)
50% quota allocation for Indian companies - enables transfer of key personnel (managers, specialists, graduate trainees) for up to 5 years renewable, supporting Indian businesses establishing presence in Oman
Contractual Service Suppliers (CSS)
Indian professionals delivering contract-based services get 2-year stays (renewable) - crucial for IT, engineering, consulting, and construction projects
Foreign Direct Investment (FDI)
100% foreign ownership permitted in most service sectors - enables Indian companies to establish wholly-owned subsidiaries without mandatory local partnership
Mode of Supply Definitions:
- Mode 1 (Cross-Border): Service delivered remotely (e.g., IT support, consulting via video calls)
- Mode 2 (Consumption Abroad): Consumer travels to service provider's country (e.g., medical tourism, education)
- Mode 3 (Commercial Presence): Service provider establishes office/subsidiary in destination country
- Mode 4 (Movement of Natural Persons): Professionals temporarily move to deliver services
Protected Sectors: Safeguarding National Interests
India strategically protects certain sectors from liberalization to safeguard farmer livelihoods, domestic industries, and national economic interests. These exclusions are intentional policy choices reflecting India's development priorities.
Dairy Products
Milk, cheese, butter, yogurt, dairy preparations
Protects livelihoods of 80+ million dairy farmers and supports cooperative movement
Tea & Coffee
All varieties of tea and coffee
Safeguards employment of millions in plantation sector and maintains quality standards
Natural Rubber
Natural rubber and latex products
Protects smallholder rubber farmers, primarily in Kerala and Northeast states
Tobacco
Unmanufactured tobacco, tobacco products
Supports tobacco-growing farmers while maintaining regulatory control
Fruits & Vegetables
Select sensitive fresh and processed items
Protects seasonal farmers from import surges and maintains price stability
Processed Foods
Select prepared food items
Supports domestic food processing industry and agricultural value chains
Precious Metals
Gold and silver bullion, base metal scrap
Manages current account balance and supports domestic recycling/processing
Jewellery
Gold and silver jewellery items
Supports domestic jewellery manufacturing ecosystem
Footwear
Footwear products
Protects employment in traditional shoemaking industry
Sports Goods
Sports equipment and goods
Supports export-oriented sports equipment manufacturing
Marbles
Marble products
Enables domestic processing while managing imports through quota-based access
Petrochemicals
Select petrochemical products
Balances access with domestic industry protection through quota-based concessions
India's approach to liberalization demonstrates strategic thinking—opening 77.79% of tariff lines while maintaining protections where needed. This ensures the agreement delivers benefits without causing disruption to sensitive domestic sectors or compromising core national interests. The protection of footwear and sports goods, while Oman liberalizes these sectors, represents a negotiated balance that supports India's domestic manufacturing employment.
Understanding Bilateral Trade Agreements
Like most trade agreements, the India-Oman CEPA reflects negotiated balance between both countries' interests. Oman opens 98.08% of tariff lines; India opens 77.79% while protecting strategically sensitive sectors. This asymmetry is intentional, negotiated, and reflects both countries' development priorities and sector sensitivities—standard practice in bilateral trade agreements worldwide.
Tariff Elimination Framework
The agreement employs a structured approach to tariff elimination, balancing immediate market access with gradual adjustment periods for sensitive products.
Immediate Elimination
Zero tariff from implementation date - instant market access for majority of liberalized tariff lines
Staged Reduction (3-Year)
Equal annual reductions over 3 years for products requiring short adjustment period
Staged Reduction (5-Year)
Equal annual reductions over 5 years for moderately sensitive products
Staged Reduction (10-Year)
Gradual reduction providing maximum adjustment time for most sensitive products within liberalized category
Tariff-Rate Quota
Lower in-quota tariff rate for specified volumes; normal rate beyond quota limits
Exclusion List
No tariff concessions - current MFN (Most Favored Nation) tariffs remain in effect
Rules of Origin: Ensuring Genuine Trade Benefits
To qualify for preferential tariffs under the CEPA, products must meet Rules of Origin (ROO) criteria proving substantial transformation occurred in the exporting country. This prevents transshipment and ensures benefits accrue to genuine India-Oman trade. Typical criteria include minimum value addition thresholds (e.g., 35-40% local content), change in tariff classification at HS code level, and specific processing requirements for certain sectors.
Implementation & Cooperation Mechanisms
Regulatory Cooperation
Standards Harmonization
Both nations commit to cooperation on technical standards, reducing non-tariff barriers and facilitating smoother trade flows.
Pharmaceutical Approvals
Streamlined approval processes with auto-clearance for products approved by FDA/EMA and recognition of GMP-certified facilities enable faster market entry.
Halal Certification
Mutual recognition of halal certification through formal, process-driven certification eliminates duplicate testing and certification costs for exporters.
Organic Certification
NPOP (National Programme for Organic Production) organic certification by Export Inspection Council (EIC) is auto-accepted in Oman without further testing.
Rules-Based Framework
Clear, predictable rules provide businesses with certainty for long-term planning and investment decisions.
Ongoing Dialogue
Formal review mechanism after 3 years ensures the agreement adapts to emerging challenges and opportunities.
Beyond Tariff Elimination
The CEPA's value extends beyond tariff reductions to include comprehensive regulatory cooperation, making it easier for businesses to navigate cross-border trade. The agreement establishes mechanisms for ongoing dialogue and cooperation to address emerging challenges and opportunities in the bilateral economic relationship, with procedural work beginning immediately after signing.
Conclusion: A New Chapter in India-Oman Relations
The India-Oman Comprehensive Economic Partnership Agreement signed on December 18, 2025, with expected implementation by March 2026, represents a watershed moment in bilateral trade relations and India's broader engagement with the Gulf region. With Oman offering near-universal duty-free access covering 98.08% of tariff lines and 99.38% of Indian exports by value, this agreement creates unprecedented opportunities for Indian businesses, workers, and entrepreneurs.
The CEPA's balanced approach—combining ambitious liberalization with strategic protections—demonstrates that trade agreements can drive economic growth while safeguarding national interests. By opening markets in sectors like textiles, leather, gems, and engineering goods where both sides liberalize, the agreement directly supports employment generation and inclusive development. Simultaneously, protections for sensitive agricultural products (dairy, tea, coffee, rubber, tobacco), bullion, jewellery, and select manufactured goods (footwear, sports goods) ensure that vulnerable domestic sectors are not adversely affected.
For MSMEs, artisans, and start-ups, the agreement is particularly transformative. Reduced compliance costs through mutual recognition of certifications, faster pharmaceutical approvals, enhanced professional mobility (50% quota for intra-corporate transferees, 2-year stays for contractual suppliers), and 100% FDI access in major service sectors create a supportive ecosystem for smaller businesses to compete globally. Historic achievements include India becoming the first country to gain access to Oman's marble blocks (addressing dependence on Turkish marble imports of ~13 lakh MT annually) and the first-ever comprehensive commitment on Traditional Medicine opening entirely new avenues for India's AYUSH sector.
The services component—with Oman's commitments across 127 sub-sectors including IT, business services, education, healthcare, and professional services—positions India as a leading services provider in high-value sectors. This diversifies India's export basket beyond goods and leverages the country's competitive advantages in knowledge-intensive services.
With bilateral trade currently at $10.61 billion (FY2024-25, showing 18.6% YoY growth) and a 3-year target to increase exports to $6 billion (50% increase from current $4 billion), the CEPA provides a concrete pathway for sustained trade growth.
Key Takeaways:
- Near-universal market access with 99.38% of Indian exports receiving duty-free treatment in Oman
- Strategic protection of sensitive sectors including agriculture, bullion, jewellery, footwear, and sports goods
- Comprehensive services liberalization across 127 sub-sectors creating high-value opportunities
- First-ever commitment on Traditional Medicine opening new frontiers for AYUSH and wellness sectors
- Historic breakthrough: First country to access Oman's marble blocks since 2019 ban
- Targeted support for MSMEs, artisans, women entrepreneurs, and start-ups through reduced compliance costs
- Enhanced professional mobility (50% quota, 2-year stays) and 100% FDI access strengthening investment flows
- Implementation by March 2026 with formal review after 3 years
- Rules-based, predictable framework providing certainty for long-term business planning
As Oman's first bilateral free trade agreement in nearly two decades and one of India's new-generation CEPAs, this partnership sets a benchmark for comprehensive, inclusive trade agreements. It demonstrates how strategic economic partnerships can unlock growth, create jobs, and build stronger bilateral relations while respecting each nation's development priorities and sensitivities. The India-Oman CEPA marks not just a trade agreement, but a foundation for deeper economic integration and long-term prosperity for both nations.