India's landmark Oman trade deal deepens Gulf push

India on Thursday signed a comprehensive economic partnership agreement (Cepa) with Oman that seeks to strengthen the country's economic and strategic engagement with the Gulf and deepen its footprint in the region.

- Dhirendra Kumar

PM Modi (left) with Sultan of Oman Haitham bin Tarik.

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The pact—India's second deep trade agreement with a Gulf nation after the UAE— aims to lock in market access, services mobility and investment footholds beyond transactional trade. For Oman, the agreement is only its second bilateral trade deal after the US in 2006.

The Cepa was signed by Union commerce and industry minister Piyush Goyal and his counterpart Qais Al Yousef, during Prime Minister Narendra Modi's two-day visit to Muscat that began on Wednesday.

Speaking at the India-Oman Business Summit, Goyal pointed to the $10 billion bilateral trade between India and Oman, and said that the Cepa will act as an enabler of a more ambitious future by offering duty-free access, addressing trade barriers, and simplifying rules.

"It unlocks near-universal duty-free access for Indian goods, expands services opportunities and ensures greater mobility for Indian professionals, while safeguarding India's sensitive sectors," he said.

According to a government official who spoke on the condition of anonymity, the Cepa with Oman will take effect in a few months once procedural formalities are completed, as was the case with the India-UAE CEPA, which was signed in February 2022 and implemented in May that year.

Under the agreement, Oman has offered zero-duty access on 98.08% of its tarifflines, covering 99.38% of India's exports by value, with immediate tariff elimination on 97.96% of tariff lines. Oman's import duties currently range from zero to 100%, with steeper tariffs on select items such as meats, wines, and tobacco.