NEW DELHI, December 21 (ANI): India has taken a significant step toward deeper integration with global supply chains by signing a Comprehensive Economic Partnership Agreement (CEPA) with Oman. The move is expected to expand bilateral trade, strengthen MSME-led exports, and enhance India’s energy security, according to Dipanwita Mazumdar, Economist at Bank of Baroda.
Signed during Prime Minister Narendra Modi’s visit to Oman earlier this week, the agreement aims to expand trade and investment flows while creating new opportunities for labor-intensive sectors such as textiles, leather, footwear, gems and jewelry, and engineering products. These sectors, closely linked to employment generation, are expected to benefit from improved market access under the pact.
The CEPA also enhances commitments in the services sector, covering education, healthcare, computer services, professional services, business services, and research and development. A key highlight of the agreement is zero-duty access on 98.08 percent of Oman’s tariff lines for Indian goods, covering nearly 99.4 percent of India’s exports to Oman by value. In return, India has offered tariff concessions on 77.79 percent of its total tariff lines, accounting for about 94.8 percent of imports from Oman. For export-sensitive items, particularly in agriculture, a tariff-rate quota (TRQ) mechanism allows limited quantities to be imported at concessional rates.
India’s exports to Oman totaled USD 4.1 billion in fiscal year 2025, representing about 0.9 percent of the country’s total exports. While exports moderated slightly after FY23, they have shown strong long-term growth, with a five-year CAGR of 12.4 percent, significantly higher than the overall growth in India’s exports. Export figures for April–October 2025 were marginally higher than the same period last year, indicating early signs of recovery.
On the import side, India’s purchases from Oman rose sharply to USD 6.6 billion in FY25, largely driven by petroleum products. Imports have grown at a five-year CAGR of 12.2 percent, outpacing overall import growth. As a result, India’s trade deficit with Oman widened to USD 2.5 billion in FY25, though it has begun to narrow in the current fiscal year as export growth strengthens.
Manufactured goods dominate India’s export basket to Oman, followed by petroleum products and agricultural goods. Within manufacturing, engineering goods and pharmaceuticals account for a substantial share, positioning them as key beneficiaries of the CEPA. The sectors explicitly targeted under the agreement together account for around 39 percent of India’s exports to Oman, boosting export competitiveness.
On the import front, crude petroleum and petroleum products form the bulk of India’s imports from Oman. Notably, the unit value of petroleum imports from Oman is among the lowest within the Gulf Cooperation Council, making Oman an attractive and cost-efficient energy partner for India. This pricing advantage could help India contain its oil import bill and diversify sourcing options.
According to Bank of Baroda, the India-Oman CEPA is strategically timed as global trade patterns undergo realignment due to rising tariffs and geopolitical shifts. The agreement strengthens India’s access to overseas markets, supports MSME exporters, and enhances resilience in energy imports. Overall, the pact is expected to boost exports, generate employment, and improve trade competitiveness, reinforcing India’s broader trade strategy in a challenging global environment.
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