India and Oman have formalized a Comprehensive Economic Partnership Agreement (CEPA) on December 18, 2025, in Muscat, marking a significant step in strengthening the economic ties between the two nations. While the agreement aims to boost trade by reducing or eliminating customs duties on a wide array of goods, India has strategically excluded certain sensitive items from tariff concessions to protect its domestic industries.
The excluded items include dairy products, gold, silver, and footwear. These exclusions reflect India's commitment to safeguarding the interests of its farmers and micro, small, and medium enterprises (MSMEs). The decision ensures that local producers of these goods will not face undue competition from Omani imports due to reduced or eliminated tariffs.
Under the CEPA, Oman has agreed to provide duty-free access to 98.08% of its tariff lines, covering 99.38% of India's exports to Oman. This will benefit several Indian sectors, including textiles, agriculture, leather goods, gems and jewelry, engineering products, pharmaceuticals, medical devices, and automobiles.
In return, India will reduce tariffs on some Omani products, such as dates, marble, and petrochemical items. For products that are sensitive to India, the tariff liberalization will be based on a tariff-rate quota (TRQ) system. This allows a specific quantity of a product to be imported at a reduced tariff rate, while imports exceeding that quantity are subject to a higher tariff.
Notably, the CEPA includes a provision for fast-tracking marketing authorizations for pharmaceutical products already approved by regulatory bodies in the United States, Europe, and the United Kingdom. This will streamline the process for Indian pharmaceutical companies to enter the Omani market.
The agreement also encompasses commitments related to trade in services. Oman has offered commitments across 127 sub-sectors, including computer-related services, professional services, audio-visual services, research and development, education, and healthcare. The CEPA further facilitates mobility for Indian professionals by liberalizing entry and stay conditions, raising quotas for intra-corporate transferees, and extending permitted stays for contractual service suppliers.
The India-Oman CEPA is expected to come into effect in the first quarter of the next fiscal year. It is the first free trade agreement for Oman in nearly two decades and India's second in six months, following a deal with the UK. The agreement is expected to significantly boost economic ties between the two countries, with bilateral trade and investment flows set to increase.
