India, Oman sign free trade pact offering zero-duty access for over 98% of Indian exports
Oman has offered immediate tariff elimination on 97.96% of tariff lines to India, which was the fourth-largest source of imports in 2025
New Delhi: India and Oman inked a free trade deal on Thursday that provides zero-duty access for Indian goods in 98.08% of Oman’s tariff lines, opens up avenues for Micro, Small, and Medium Enterprises (MSMEs) and labour-intensive sectors, and protects the mobility of Indian professionals, with Prime Minister Narendra Modi calling on Omani businesses to benefit from India’s growth.
Oman is one of India’s closest strategic partners in West Asia — it is the only Gulf Cooperation Council (GCC) member with which New Delhi conducts tri-services joint exercises — and the Comprehensive Economic Partnership Agreement (CEPA), signed by commerce minister Piyush Goyal and his Omani counterpart Qais bin Mohammed Al Yousef, will help ramp up two-way trade, which has grown from $6.7 billion in 2017-18 to $10.6 billion in 2024-25.
“The Comprehensive Economic Partnership Agreement (CEPA) will energise our ties in the 21st century,” Modi said on social media. “It will give new momentum to trade, investment and open new opportunities across different sectors.”
The CEPA — the second trade deal concluded by India this year, after one with the UK — provides zero-duty access for Indian goods in 98.08% of Oman’s tariff lines, covering 99.38% of Indian exports by value, and opens up opportunities for labour-intensive sectors such as textiles, leather, gems and jewellery, pharmaceuticals, medical devices, engineering products and automobiles, and MSMEs.
Oman has offered immediate tariff elimination on 97.96% of tariff lines to India, which was the fourth-largest source of imports in 2025. In response, India is offering tariff liberalisation on 77.79% of its 12,556 tariff lines, which covers 94.81% of Oman’s exports by value.
At a time when Oman has embarked on its so-called “Omanisation” drive to reserve more jobs for locals, the CEPA provides an enhanced mobility framework for Indian workers. For the first time, Oman has offered commitments under Mode 4 of the WTO’s General Agreement on Trade in Services, including increasing the quota for intra-corporate transferees from 20% to 50%, along with extending the duration of stay for contractual service suppliers from 90 days to two years, with the possibility of a two-year extension.
The trade deal also provides more liberal entry and stay conditions for skilled professionals in sectors such as accountancy, taxation, architecture, and medical and allied services. These concessions are significant as Oman is home to more than 675,000 Indians, including nearly 520,000 with work visas, and their annual remittances are worth almost $2 billion.
The CEPA, also the first bilateral trade deal that Oman has signed with any country since one with the US in 2006, has a provision for future negotiations on social security coverage for workers following the implementation of Oman’s contributory social security system. It will also fast-track marketing authorisations for pharmaceutical products approved by authorities in the European Union, the US and the UK, and the acceptance of good manufacturing practice (GMP) inspection documents, reducing time and costs for Indian exporters.
Sensitive Indian sectors, such as dairy products, tea, coffee, meat, cereals, vegetable oils, sugar, rubber products and tobacco products, were excluded from the trade deal. Indian services companies can also expand their operations in Oman under a provision for 100% foreign direct investment (FDI). There are more than 6,000 India-Oman joint ventures in the Gulf country, adding $7.5 billion in total capital investments.
Following his discussions with Sultan Haitham bin Tarik, who witnessed the signing of the CEPA, Modi thanked the Omani leader for his efforts that ensured the conclusion of the deal. “It is indeed a new and golden chapter of bilateral cooperation,” Modi said, noting that the CEPA will “energise our ties in the 21st century”.
Earlier, while addressing the India-Oman Business Forum, Modi pointed to the trust and friendship built over 70 years of diplomatic ties and described the CEPA as the blueprint for India and Oman’s shared future. India’s rapid growth — more than 8% in the last quarter — amid global uncertainty reflected its resilient nature and inherent strengths. “When India grows, it makes its friends partners in its growth. We are doing just that today,” he said.
Modi invited Omani businesses to look beyond traditional areas such as energy, petrochemicals and fertilisers, and to explore opportunities in green energy, solar parks, energy storage, smart grids, fintech, AI and cyber security. He proposed the creation of an India-Oman Agri Innovation Hub and an India-Oman Innovation Bridge, and said these were an invitation to invest, innovate and build the future together.
The two sides also finalised memorandums of understanding (MoUs) for cooperation in agriculture, higher education — including exchanges of faculty and researchers — and maritime heritage, and an executive programme for collaboration in millet cultivation and agri-food innovation. They also adopted a Joint Vision Document on Maritime Cooperation to strengthen collaboration in regional maritime security and the blue economy.
During their talks, Modi and Sultan Haitham discussed cooperation in food security, manufacturing, digital technologies, critical minerals, logistics and space, and the possibility of linking India’s Unified Payments Interface (UPI) with the Omani digital payment system and promoting trade in local currencies. They also explored the possibility of giving a new thrust to energy cooperation through long-term arrangements, renewable energy ventures and green hydrogen projects, the external affairs ministry said in a readout.
“The two leaders reaffirmed their commitment to further enhancing defence and security collaboration, including in the maritime domain,” the readout said.
Modi and Sultan Haitham also focused on regional and global issues, including the situation in Gaza. Arun Kumar Chatterjee, secretary (overseas Indian affairs) in the external affairs ministry, told a media briefing: “While expressing concern over the humanitarian situation in Gaza and calling for the safe and timely delivery of humanitarian aid to civilians, the two leaders welcomed the signing of the first phase of the Gaza Peace Plan and reiterated their support for it.”
They also condemned all forms of terrorism and stated that no justification can be accepted for terrorist acts, Chatterjee said.
Sultan Haitham conferred the Order of Oman, the country’s second-highest honour, on Modi for his contributions to bilateral ties and his visionary leadership. The award, instituted in 1970 by Sultan Qaboos bin Said, has been given to global leaders such as Saudi Crown Prince Mohammed bin Salman, Belgium’s King Philippe, Jordan’s King Abdullah II, and Egypt’s President Abdel Fattah el-Sisi.
Modi dedicated the award to the age-old friendship between the two countries and described it as a tribute to the affection between the 1.4 billion people of India and the citizens of Oman.
