India-Oman trade pact enters into force

The India-Oman Comprehensive Economic Partnership Agreement went live on 1 June 2026, giving zero-duty access to almost all of India's exports to the Sultanate.

What happened

• The India-Oman Comprehensive Economic Partnership Agreement (CEPA) entered into force on 1 June 2026, after both governments completed their internal ratification processes.
• The pact was signed on 18 December 2025 in Muscat, in the presence of Prime Minister Narendra Modi and Sultan Haitham bin Tarik Al Said.
• It was operationalised in New Delhi in the presence of Commerce and Industry Minister Piyush Goyal and Oman's Ambassador to India, H.E. Issa Saleh Al Shibani.
• To mark the start, the first preferential-tariff consignments — agriculture and gems-and-jewellery shipments from Mumbai, Kolkata and Chennai — were flagged off.
• The headline gain: zero-duty access for 99.38% of India's export value to Oman, up from just 15.33% that entered duty-free earlier under the Most-Favoured-Nation (MFN) regime.
• It is India's second CEPA in the Gulf, following the India-UAE CEPA that took effect in 2022.

For Prelims

The agreement itself

• Name: India-Oman Comprehensive Economic Partnership Agreement (CEPA). A CEPA is a deep trade pact that goes beyond a simple Free Trade Agreement (FTA) — it covers goods, services, professional mobility, investment, regulatory cooperation and dispute settlement, not just tariff cuts.
• Signed: 18 December 2025, Muscat · In force: 1 June 2026 · Administering ministry (India): Ministry of Commerce & Industry.
• Goods coverage: duty-free access for 99.38% of India's exports to Oman by value, covering 98.08% of Oman's tariff lines. All zero-duty concessions apply immediately, not in phased instalments.
• India's offer in return: tariff liberalisation on 77.79% of India's tariff lines, covering 94.81% of imports from Oman by value — an asymmetric deal tilted in India's favour, with safeguards retained.
• Market size: Oman's import market is worth roughly USD 28 billion; India now competes there on price terms equal to or better than rivals without a trade pact.

India's place in the Gulf trade map (the comparison)

• India-Oman is India's second CEPA in the Gulf, after the India-UAE CEPA — India's first deep trade pact in the region, signed 18 February 2022 and in force from 1 May 2022. The UAE pact pushed India-UAE bilateral trade past the USD 100-billion mark.
• From Oman's side, India is only the second nation after the United States to secure a comprehensive bilateral trade pact with the Sultanate — a useful distinction to keep separate from India's own count.
• Oman is India's second-largest trading partner in the Gulf (the UAE is the largest). Both pacts sit inside India's wider push for a broader India-GCC (Gulf Cooperation Council) trade arrangement.
• GCC members (the full set, for the "how many" pattern): Saudi Arabia, the UAE, Oman, Qatar, Kuwait, and Bahrain — six countries. Oman, the UAE and Saudi Arabia are the ones India trades with most heavily.
• India has used the CEPA label with several partners — UAE, Australia (ECTA, 2022), and others — while reserving "CECA" (Comprehensive Economic Cooperation Agreement) for older deals such as the one with Singapore. The terms describe the same family of deep trade agreements.

India and Oman — the wider relationship

• Oman is a long-standing partner: it is the only GCC country with which India holds a regular bilateral maritime exercise, and the two share defence, energy and diaspora ties built over decades. A large Indian community lives and works in Oman, making remittances and labour mobility central to the relationship — which is why the CEPA's professional-mobility chapter and the promised Social Security Agreement matter.
• Oman's location at the mouth of the Gulf — flanking the Strait of Hormuz, through which a large share of the world's seaborne oil moves — gives it outsized strategic weight. India's access to Oman's port at Duqm supports India's maritime presence in the western Indian Ocean.
• The CEPA, the government says, knits trade, services, investment and logistics into a single "economic architecture" rather than a one-off tariff cut — the explicit aim is resilient supply chains and deeper integration into regional and global value chains under the "Viksit Bharat @2047" framing.
• It also fits India's broader West Asia strategy alongside the UAE CEPA, the I2U2 grouping (India, Israel, the UAE and the US) and the proposed India-Middle East-Europe Economic Corridor (IMEC) — a set of overlapping economic and connectivity initiatives anchoring India in the Gulf.

Bilateral trade and the strategic geography

• Bilateral trade: USD 11.18 billion in FY 2025-26, up from USD 10.61 billion in FY 2024-25 — a steady upward trend the pact is expected to accelerate.
• Oman's gateway ports — Sohar, Duqm and Salalah — give Indian exporters onward reach not just into Oman but into the wider GCC and East African markets. Duqm in particular is a deep-water port and special economic zone on Oman's south-east coast facing the Arabian Sea, outside the Strait of Hormuz chokepoint.
• India is Oman's second-largest agricultural supplier, with a 17.8% share of Omani agri-imports; India already supplies over 94% of Oman's bovine-meat imports and over 98% of its fresh-egg imports.

What the deal covers — sector by sector

• Marine products: shrimp, fish and cuttlefish get immediate zero duty (replacing duties up to 5%) — gains expected for Andhra Pradesh, Kerala, Tamil Nadu and Gujarat.
• Gems & jewellery: duties up to 5% eliminated from day one; clusters in Surat (diamonds), Jaipur (gemstones), Mumbai, Kolkata and Chennai positioned to gain over rivals from Italy, Turkey, Thailand and China.
• Agriculture & processed food: duty-free for basmati and parboiled rice, cashews, onions, potatoes, butter, sweet biscuits, honey, frozen bovine meat and eggs; mango varieties (Alphonso, Kesar, Dasheri) gain too.
• Pharmaceuticals: binding zero duty on medicines and vaccines; products already cleared by the USFDA, EMA, UK MHRA or Australia's TGA get marketing authorisation in Oman within 90 days without prior inspection.
• Engineering & electronics: all engineering goods get zero duty (replacing MFN tariffs of 0–5%); machinery, automobiles, iron and steel, and electrical equipment benefit. India's engineering exports to Oman were USD 875.83 million in FY 2025-26.
• Services: Oman's "best-ever" offer opens 127 services sub-sectors — computer services, professional services, healthcare, education, finance, construction, tourism and telecom — described as the most comprehensive services offer any GCC country has made to India.
• Professional mobility: the Intra-Corporate Transferee (ICT) ceiling was raised from 20% to 50%; business visitors may stay up to 90 days, independent professionals up to 180 days, and ICTs up to 4 years. A future Social Security Agreement (SSA) is provided for, to avoid dual social-security contributions for Indian workers.
• Trade facilitation: Oman will mandatorily accept India's Export Inspection Council (EIC) certificates and recognises India's NPOP organic and halal certification — cutting duplicate testing at Omani ports.

What it is NOT (the negatives to remember)

• It is not a blanket free-trade pact. India deliberately excluded sensitive sectors from market access: dairy, cereals, fruits, vegetables, edible oils, oilseeds, rubber, leather and spices. These are kept out to protect farmers, food security and domestic industry.
• It is not phased over years on India's export side — the 99.38% duty-free access for India's goods is immediate, not staggered.
• It does not abandon safeguards: Tariff Rate Quotas (TRQs) and Minimum Import Price (MIP) mechanisms are built in for selected sensitive industrial and agricultural items.
• It is not India's first Gulf CEPA — that was the UAE (2022). And the "second nation after the US" line is from Oman's perspective, not India's CEPA tally.

For Mains