In a major milestone for the country's economy, India has signed a historic Comprehensive Economic Partnership Agreement (CEPA) with the Sultanate of Oman in Muscat on Thursday. With this agreement, India now gets unprecedented market access for its goods with zero-duty on 98.08% of Oman’s tariff lines, covering 99.38% of India’s exports by value.

The agreement was signed by the Union Minister of Commerce & Industry Piyush Goyal and Oman’s Minister of Commerce, Industry & Investment Promotion Qais bin Mohammed Al Yousef in presence of India’s Prime Minister Narendra Modi and Sultan Haitham bin Tarik.

“The India-Oman CEPA strengthens the historical strong ties of India with Oman and signifies an ambitious and balanced economic framework that significantly enhances opportunities for Indian exporters and professionals," Goyal said. “It unlocks nearly universal duty-free access for Indian goods in the Omani market, expands services commitments across key high-growth sectors, and ensures greater mobility for Indian professionals.” 

What does India get?

Apart from zero-duty access to its markets, Oman offered all major labour-intensive sectors, including gems & jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agricultural products, engineering products, pharmaceuticals, medical devices, and automobiles receive full tariff elimination. Incidentally, Oman has offered immediate tariff elimination on 97.96% tariff lines.

India’s service sector will also see a wide range of benefits as Oman has extended substantial commitments across a broad spectrum of sectors, including computer-related services, business and professional services, audio-visual services, research and development, and education and health services.

Furthermore, CEPA also provides an enhanced mobility framework for Indian professionals. 

Oman has offered wide-ranging commitments under key Mode 4 categories, including a notable increase in the quota for intra-corporate transferees from 20% to 50%, together with a longer permitted duration of stay for contractual service suppliers—extended from the existing 90 days to two years, with the possibility of a further two-year extension. 

The CEPA further provides for 100% FDI by Indian companies into major services sectors in Oman.

What is in it for Oman?

India is offering tariff liberalisation on 77.79% of its total tariff lines (12,556), which covers 94.81% of India’s imports from Oman by value. For the products of export interest to Oman and which are sensitive to India, the offer is mostly a tariff-rate quota (TRQ)-based tariff liberalisation.

However, to safeguard its interests, sensitive products have been kept in the exclusion category by India without offering any concessions, especially agricultural products, including dairy, tea, coffee, rubber, and tobacco products; gold and silver bullion, jewellery; other labour-intensive products such as footwear, sports goods; and scrap of many base metals.

This is the second free trade agreement signed in the last six months after the one with the UK, and is a part of the strategy to sign trade agreements with developed economies that are not competing with India's labour-intensive interests and provide opportunities for Indian businesses.