India and Oman are on the verge of signing a Comprehensive Economic Partnership Agreement (CEPA), a move poised to significantly bolster trade and investment ties between the two nations. Negotiations are in the final stages, with both countries working to resolve remaining issues. The agreement, which has been under discussion since November 2023, promises to grant India access to 98% of products in Oman, along with substantial liberalization in services.
One of the key sticking points in the negotiations revolves around Oman's "Omanisation" policy. This policy mandates that companies employ a specific percentage of Omani nationals, with quotas varying across industries and subject to periodic revisions. India is seeking assurances that the current labor regulations remain unchanged for its workers after the agreement is finalized. New Delhi aims to freeze the Omanisation targets at their current levels for Indian companies, ensuring that the policy does not become more restrictive in the future and that Indian professionals can continue to work in Oman without facing increasingly stringent job reservation policies.
Oman is India's third-largest export destination among the Gulf Cooperation Council (GCC) countries. In the fiscal year 2024-25, India's exports to Oman stood at $4.43 billion, while imports exceeded $6.51 billion. The CEPA is expected to further enhance this trade relationship by reducing or eliminating customs duties and easing trade norms, thereby promoting trade in goods, services, and investments. India already has a similar agreement with the UAE, another GCC member, which came into effect in May 2022.
The Comprehensive Economic Partnership Agreement (CEPA) with Oman is more extensive in scope and liberalization than the existing agreement with the UAE. With the CEPA, India will gain access to 98% of its products in Oman and significant access in services. Oman's import duties range from nil to 100%, along with specific duties. Specific meats, wines and tobacco products are among items attract 100% duty.
A significant boost to the discussions was provided by Commerce and Industry Minister Piyush Goyal's visit to Muscat in January 2025. During this visit, he attended the 11th Session of the India-Oman Joint Commission Meeting (JCM) and met with top Omani leaders. On the sidelines of the visit, both countries signed a protocol to amend the Double Taxation Avoidance Agreement (DTAA), aligning it with international standards on cross-border taxation, simplifying tax procedures, and promoting greater cooperation in tax matters.
The India-Oman CEPA holds strategic importance as it can widen India's access to West Asia, fostering economic and strategic ties in a region of critical importance. India's key imports from Oman include petroleum products and urea, which account for over 70% of imports. Other important items are propylene and ethylene polymers, pet coke, gypsum, chemicals, and iron and steel.
The successful conclusion and implementation of the CEPA are expected to mark a new milestone in bilateral trade relations, significantly scaling up two-way trade and investments between India and Oman.
