Milestone Agreement: India And Oman Sign Comprehensive Economic Partnership Agreement (CEPA)
SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation and Infrastructure | SDG 17: Partnerships for the Goals
Ministry of Commerce and Industry | Ministry of External Affairs | Department of Commerce
On December 18, 2025, India and Oman officially signed a Comprehensive Economic Partnership Agreement (CEPA) in Muscat, marking a significant milestone in their 70-year diplomatic relationship. The agreement, signed by Union Minister Piyush Goyal and Oman’s Minister Qais bin Mohammed Al Yousef, is Oman’s first free trade pact in nearly two decades. It aims to deepen bilateral economic integration by significantly reducing or eliminating customs duties on a wide range of goods and liberalizing trade in services.
Key strategic features of the India-Oman CEPA include:
Unprecedented Market Access: Oman has provided zero-duty access on 98.08% of its tariff lines, covering over 99% of India’s current exports by value.
Strict Rules of Origin: To protect domestic industries, the agreement includes stringent Rules of Origin to prevent third-country products, particularly from China, from being routed through Oman to avail duty concessions.
Export Opportunities: The pact unlocks significant potential for India’s labor-intensive sectors, including textiles, footwear, gems & jewellery, engineering products, and pharmaceuticals.
Services and Mobility: For the first time, Oman has offered high-quality commitments across 127 sub-sectors, including professional services (accounting, architecture), healthcare, and education, while liberalizing entry for Indian professionals.
Pharma Fast-Tracking: The agreement includes streamlined approval pathways for Indian pharmaceutical products already cleared by major global regulators like the USFDA and EMA.
Investment Facilitation: With over 6,000 joint ventures already in place and Indian investments exceeding $7.5 billion, the CEPA provides a stable framework for further cooperation in green hydrogen, renewable energy, and logistics.
What is the significance of “Rules of Origin” in a CEPA? Rules of Origin are the criteria used to determine the national source of a product. In the context of the India-Oman CEPA, these rules ensure that the preferential tariff benefits are restricted to goods genuinely produced or significantly transformed within the two signatory nations, preventing third-party countries from using the agreement to route their products into either market at lower duties.
Policy Relevance
The CEPA reinforces India’s “Look West” strategy, positioning Oman as a strategic gateway to the wider GCC, African, and European markets. By securing duty-free access for critical industrial exports and establishing fast-track regulatory approvals for pharma, the agreement enhances the global competitiveness of Indian MSMEs. Furthermore, it stabilizes India’s energy security by reinforcing long-term supply chains for crude oil, LNG, and fertilizers, which currently dominate Omani imports.
Relevant Question for Policy Stakeholders: How can Indian exporters leverage the new duty-free access to diversify the export basket beyond traditional fuels and cereals into high-value electronics and precision engineering?
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