India-Oman CEPA Enters into Force: What the Agreement Means for Omani Businesses

The India-Oman CEPA strengthens bilateral trade by reducing tariffs, improving market access, and creating new opportunities for businesses in both countries. For Oman, the agreement supports export diversification, lowers sourcing costs, and reinforces the Sultanate’s role as a logistics and investment gateway linking India with the Gulf and East Africa.

The Comprehensive Economic Partnership Agreement (CEPA) between Oman and India, entered into force on June 1, 2026, opening a new phase in bilateral economic relations between the two countries.

The agreement was signed in Muscat on December 18, 2025, in the presence of Sultan Haitham bin Tarik and Indian Prime Minister Narendra Modi. Oman subsequently ratified the agreement through Royal Decree No. 30/2026 in February 2026.

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The CEPA is Oman’s first comprehensive bilateral trade agreement since its free trade agreement with the United States (which entered into force in 2009). Its implementation reflects the Sultanate’s efforts to diversify its international trade partnerships, attract foreign investment, and create new opportunities for Omani companies under Oman Vision 2040.

India-Oman bilateral trade

Oman and India have longstanding commercial ties across energy, agriculture, manufacturing, logistics, and services. Bilateral trade reached US$11.18 billion in FY 2025-26, up from US$10.61 billion in FY 2024-25. Oman maintains a trade surplus with India. In FY 2024-25, Oman exported goods worth approximately US$6.55 billion to India while importing around US$4.06 billion in Indian products.

Omani exports to India are concentrated in petroleum products and urea, which collectively account for more than 70 percent of Oman’s exports to the country. Other important export categories include polyethylene, gypsum, ethylene plastics, and metals.

India is also an important destination for Oman’s non-oil exports. In FY 2024-25, India was Oman’s third-largest market for non-oil exports and its fourth-largest source of non-oil imports.

The CEPA provides a framework for Oman to build on these trade flows while encouraging greater diversification into downstream industries and value-added products.

How the CEPA improves market access for Omani exporters

Under the agreement, India will reduce or eliminate customs duties on approximately 77.79 percent of its tariff lines. These concessions cover around 94.81 percent of the value of imports from Oman.

The scale of India’s consumer and industrial market makes these tariff concessions particularly relevant for Omani exporters. Lower duties can strengthen the competitiveness of products manufactured in Oman and help local companies expand beyond the relatively limited domestic market.

The principal sectors expected to benefit include:

• Petrochemicals and downstream chemical products;
• Fertilizers and urea;
• Metals and mineral-based products;
• Plastics and polyethylene;
• Pharmaceuticals; and
• Selected industrial goods.

The CEPA may also support Oman’s broader industrial development objectives. By improving access to India for products manufactured or processed in the Sultanate, the agreement could strengthen the business case for investment in Oman’s industrial zones, free zones, and special economic zones.

Companies operating in Duqm, Sohar, and Salalah may be particularly well positioned to benefit from the agreement due to their access to port infrastructure, industrial clusters, and international shipping routes.

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Petrochemicals and fertilizers remain central to Oman’s export strategy

Energy and energy-related products will remain an important pillar of Oman-India trade. However, the CEPA creates opportunities to move beyond the export of hydrocarbons by supporting greater trade in downstream products.

Petrochemicals, plastics, and fertilizers are among the sectors with the clearest potential for expansion. Oman has already expressed its willingness to increase supplies of petrochemicals and fertilizers to India as the agreement takes effect.

This is commercially significant for both countries:

• India is seeking stable and diversified sources of industrial inputs, energy-related products, and fertilizers.
• Oman, meanwhile, can use the CEPA to strengthen its position as a reliable supplier while attracting investment into processing, manufacturing, and export-oriented industries.

The agreement may also reinforce existing bilateral projects, including the Oman India Fertiliser Company (OMIFCO), which has played an important role in supplying urea to the Indian market.

Opportunities for importers and distributors in Oman

The CEPA also has implications for Omani companies importing goods from India.

Oman has committed to granting duty-free access to Indian exports across 98.08 percent of its tariff lines, covering 99.38 percent of Indian export value. Most of these concessions take effect immediately, while certain tariff reductions will be phased in over periods of up to five or ten years.

Indian products that are likely to become more competitive in Oman include:

• Food and agricultural products;
• Textiles and apparel;
• Pharmaceuticals and medical devices;
• Machinery and engineering products;
• Automobiles and auto components;
• Plastics and rubber products;
• Consumer goods;
• Furniture;
• Gems and jewellery; and
• Marine products.

For Omani importers, retailers, manufacturers, and distributors, lower tariffs could reduce sourcing costs and expand the range of products available in the domestic market.

The agreement could also benefit Omani businesses that use Indian inputs in local production. Lower-cost machinery, intermediate goods, chemicals, and raw materials may improve the competitiveness of manufacturing and construction activities within the Sultanate.

Supporting Oman’s position as a regional logistics hub

The CEPA has a wider strategic dimension for Oman.

The Sultanate occupies a valuable position on the Arabian Sea, outside the Strait of Hormuz. Its ports provide connections to India, the Gulf, East Africa, and wider international markets. This geography strengthens Oman’s potential role as a logistics and re-export hub for Indian companies seeking access to regional markets.

Sohar, Duqm, and Salalah are particularly important within this context. Each location offers a combination of port infrastructure, industrial capacity, and access to international shipping routes.

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The implementation of the CEPA may encourage Indian businesses to consider Oman as a base for regional distribution, manufacturing, and supply-chain diversification. This could create opportunities for Omani companies providing warehousing, freight forwarding, customs clearance, transport, cold-chain services, and industrial support.

It may also support Oman’s efforts to attract foreign investment into free zones and industrial estates, particularly from Indian companies seeking to serve Gulf and African markets.

Services, investment, and professional mobility

The CEPA extends beyond trade in goods. It also covers services, investment, customs procedures, digital trade, intellectual property rights, and regulatory cooperation.

India and Oman have made reciprocal commitments in several services sectors, including:

• Professional services;
• Education;
• Healthcare;
• Information technology;
• Computer services;
• Infrastructure services; and
• Audiovisual services.

The agreement also introduces provisions governing the temporary movement of professionals and contractual service suppliers.

For Omani businesses, this may create opportunities to expand services in India, establish partnerships with Indian firms, and access expertise in sectors that support the Sultanate’s diversification strategy. These include healthcare, digital services, education, logistics, engineering, and infrastructure.

The investment provisions are also relevant for companies considering cross-border expansion. The CEPA includes commitments aimed at encouraging investment in key service sectors and improving the predictability of the business environment.

Rules of origin and compliance requirements

Businesses seeking preferential tariff treatment must confirm that their products meet the agreement’s rules of origin.

The CEPA does not automatically provide duty-free treatment to every product shipped between Oman and India. Preferential tariffs apply only to qualifying originating goods. Companies must review the applicable product-specific rules and prepare the required documentation before claiming reduced customs duties.

The agreement also includes provisions covering:

• Customs procedures and trade facilitation;
• Sanitary and phytosanitary measures;
• Technical barriers to trade;
• Certificates of origin;
• Trade remedies;
• Digital trade;
• Intellectual property rights; and
• Dispute settlement.

Omani exporters should assess the tariff classification of their products, confirm the applicable duty reduction schedule, and review the relevant rules of origin before shipping goods to India.

Importers should also evaluate whether existing supply contracts, customs procedures, and pricing arrangements need to be updated following the agreement’s implementation.

Considerations for Omani businesses

The CEPA presents opportunities across a wide range of sectors, but the commercial impact will vary depending on the product, tariff classification, rules of origin, and implementation schedule.

Companies should consider the following steps:

1. Review existing imports and exports between Oman and India;
2. Identify products eligible for immediate or phased tariff reductions;
3. Confirm the applicable rules of origin and documentation requirements;
4. Evaluate whether lower tariffs create opportunities to enter new product categories;
5. Review sourcing strategies and distribution agreements;
6. Assess opportunities for joint ventures, industrial investment, and regional re-export activities; and
7. Monitor future guidance issued by customs authorities and relevant government agencies.

Outlook

The entry into force of the India-Oman CEPA marks an important step in Oman’s economic diversification strategy.

India offers Omani companies access to a large and growing market for petrochemicals, fertilizers, metals, pharmaceuticals, and industrial goods. At the same time, Oman’s location, port infrastructure, and investment environment strengthen its potential role as a gateway for Indian businesses seeking to reach the Gulf and East Africa.

For Omani businesses, the most immediate priority is to understand how the agreement affects existing trade flows. Over the longer term, the CEPA could support deeper industrial cooperation, stronger logistics links, increased investment, and the development of more diversified value chains between Oman and India.

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