India-Oman Free Trade Pact Begins, Opens Duty-Free Access for 99% of Exports

New Delhi: The India-Oman Comprehensive Economic Partnership Agreement (CEPA) entered into force on Monday, providing duty-free access to most of India’s exports to the Gulf country, marking a major milestone in bilateral economic ties.

The agreement, signed in Muscat on 18 December 2025, entered into force after both countries completed their internal procedures. Indian Commerce and Industry Minister Piyush Goyal and Omani Ambassador to India Issa Saleh Al Shibani flagged off the first shipments benefiting from preferential tariff benefits under the pact, including agriculture and exports of gems and jewelery from Mumbai, Kolkata and Chennai.

The agreement provides duty-free access for 99.38% of India’s exports by value to 98.08% of Oman’s tariff lines, the commerce ministry said in a statement. Before CEPA, only 15.33% of India’s exports entered Oman duty-free under the Most Favored Nation (MFN).

Read also | Small market, big energy: Why Oman CEPA is a long-term power play

“The operationalization of India-Omani CEPA marks a strategic shift from transversal trade to deeper economic integration. By ensuring zero tariff access at almost all customs lines, the agreement offers better market access, service sector mobility while offering opportunities in logistics manufacturing and investment linkages,” said Ram Singh, Professor and Director, Indian Institute of Foreign Trade (IIFT), New Delhi.

Emerging gate

He added that Oman is emerging as a key gateway for Indian goods to the GCC, Africa and wider West Asia.

“Oman and India can strengthen supply chain resilience and achieve long-term complementarity in areas such as polysilicon for solar cells, fertilizers and defense cooperation to tap the unexplored potential to serve the interests of both economies under this CEPA,” Singh added.

Bilateral trade between India and Oman grew to $11.18 billion in FY26 from $10.61 billion in FY25. Oman is India’s second largest trading partner in the Gulf region and is seen as a gateway to the wider GCC and East African markets thanks to its logistics and port infrastructure.

Describing the agreement as a landmark step, Goyal said, “The India-Oman CEPA represents a defining milestone in India’s engagement in Oman and reflects the vision of Prime Minister Shri Narendra Modi to create business partnerships that bring benefits to farmers, fishermen, youth, women, entrepreneurs and small and medium enterprises.”

Read also | Oman-SBI-backed OIJIF closes USD 100m third fund for the first time

“With 99.38% of India’s exports enjoying duty-free access, the Agreement opens up new opportunities for our exporters and sourcing professionals. Oman is our trusted partner, a bridge for our people and a gateway to the Gulf and East Africa,” he said in a statement.

The minister further said that the pact will promote job creation, investment and integration into regional and global value chains by providing significant benefits to labour-intensive industries.

“India’s engineering industry is one of Oman’s key exports and is set to gain significantly from the trade pact. In 2025-26, India’s engineering exports to Oman are set to grow by 9.1% to reach $886 million. Industrial machinery, electrical equipment, auto parts, metals and non-ferrous metals are among the key engineering product segments that could benefit from the FTA, India ChaEEPC.

Amid changing business patterns

Commerce Minister Rajesh Agrawal said the agreement comes at a time when global trade patterns are being reshaped by supply chain diversification and new economic corridors.

“The India-Omani CEPA brings new energy to our bilateral economic engagement, anchored in complementary strengths, deeper regulatory cooperation and a shared commitment to growth,” Agrawal said.

The ministry said sectors expected to benefit include agriculture and processed food, marine products, gems and jewellery, pharmaceuticals, electronics, engineering goods, textiles, footwear and automobiles.

In services, Oman has made commitments in 127 sub-sectors, which include computer and related services, professional services, health, education, financial services, telecommunications, construction and tourism. The ministry called it the most comprehensive service offering extended to India by any GCC country.

Read also | Why is the India-Oman trade agreement important?

The contract also provides binding commitments for professionals in fields such as accounting, engineering, medicine, information technology, education and construction. Business visitors will be able to stay in Oman for up to 90 days, independent professionals for up to 180 days and intra-company transferees for up to four years.

In facilitating trade, Oman will be required to accept certificates issued by India’s Export Control Council (EIC), while India’s NPOP (National Organic Production Program) and Halal certification schemes will also be recognised.

However, India has retained the protection of sensitive sectors. Dairy products, cereals, fruits, vegetables, edible oils, oilseeds, rubber, leather, spices and several key agricultural products remain outside the market access obligations.