India-Oman CEPA Takes Effect, Enhancing Bilateral Trade and Industrial Growth Opportunities

The Comprehensive Economic Partnership Agreement (CEPA) between India and Oman officially entered into force on June 1, 2026, ushering in a new phase of strengthened economic cooperation between the two countries. The agreement was signed on December 18, 2025, in Muscat, in the presence of Sultan Haitham bin Tarik and Indian Prime Minister Narendra Modi. Oman ratified the CEPA through Royal Decree No. 30/2026 in February 2026.

This CEPA represents Oman’s first comprehensive bilateral trade agreement since its free trade agreement with the United States, which took effect in 2009. Its implementation aligns with Oman’s strategic objectives under Oman Vision 2040 to diversify international trade partnerships, attract foreign investment, and create new opportunities for domestic companies.

Oman and India share longstanding commercial ties spanning sectors such as energy, agriculture, manufacturing, logistics, and services. Bilateral trade reached US$11.18 billion in the fiscal year 2025-26, up from US$10.61 billion in 2024-25. Oman maintains a trade surplus with India, exporting approximately US$6.55 billion worth of goods while importing around US$4.06 billion in Indian products during FY 2024-25.

Omani exports to India are primarily concentrated in petroleum products and urea, which together account for over 70 percent of total exports. Other significant export categories include polyethylene, gypsum, ethylene plastics, and metals. India is also a key market for Oman’s non-oil exports, ranking as the Sultanate’s third-largest destination for such goods and the fourth-largest source of non-oil imports in FY 2024-25.

The CEPA establishes a framework to build on these trade flows and encourages diversification into downstream industries and value-added products. Under the agreement, India will reduce or eliminate customs duties on approximately 77.79 percent of its tariff lines, covering about 94.81 percent of the value of imports from Oman.

Given the scale of India’s consumer and industrial markets, these tariff concessions are particularly significant for Omani exporters. Lower duties are expected to enhance the competitiveness of products manufactured in Oman and enable local companies to expand beyond the Sultanate’s relatively limited domestic market.

The agreement also supports Oman’s broader industrial development goals by improving access to India for products manufactured or processed in the Sultanate. This could strengthen the business case for investment in Oman’s industrial zones, free zones, and special economic zones.

Companies operating in key industrial hubs such as Duqm, Sohar, and Salalah stand to benefit from the CEPA due to their access to port infrastructure, industrial clusters, and international shipping routes.

Energy and energy-related products will continue to be a cornerstone of Oman-India trade. However, the CEPA facilitates opportunities to expand trade beyond hydrocarbons by promoting downstream products such as petrochemicals, plastics, and fertilizers.

Oman has expressed its intention to increase supplies of petrochemicals and fertilizers to India as the agreement takes effect. This aligns with efforts to strengthen Oman’s position as a reliable supplier while attracting investment into processing, manufacturing, and export-oriented industries.

The CEPA may also reinforce existing bilateral projects, including the Oman India Fertiliser Company (OMIFCO), which plays a vital role in supplying urea to the Indian market.

On the reciprocal side, Oman has committed to granting duty-free access to Indian exports on 98.08 percent of its tariff lines, covering 99.38 percent of the value of Indian exports. Most of these concessions are effective immediately, with some tariff reductions phased over five to ten years.

Overall, the India-Oman CEPA is poised to deepen economic ties, enhance trade diversification, and foster industrial development, benefiting businesses and economies in both countries.