India, Oman set to sign CEPA, paving way for stronger Gulf trade and strategic ties
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New Delhi: India and Oman are set to sign a Comprehensive Economic Partnership Agreement (CEPA) covering goods, services, investments and labor mobility, with a formal announcement expected later this month.
Described as more than just a tariff arrangement, the pact will serve as a strategic economic bridge between South Asia and the Gulf, offering India tariff-free access to the Omani market, securing energy and labor interests, attracting Gulf investment, and deepening engagement in a region vital to global trade and security, according to India Narrative.
The agreement will progressively reduce or eliminate customs duties on a wide range of goods. For Indian exports such as iron and steel, electronics, textiles, plastics, automotive components and machinery, the current 5 per cent duty will drop to zero, boosting competitiveness in line with Make in India objectives and creating opportunities for scaling up production and generating jobs. Small and medium enterprises (SMEs) are also expected to benefit from tariff-free access to Gulf markets without previous pricing disadvantages.
The CEPA is likely to spur Omani and wider Gulf investment in Indian infrastructure, including ports, industrial corridors and logistics hubs. India, in turn, will have greater scope to participate in projects such as Oman’s Duqm Port, improving maritime connectivity.
A key discussion point was Oman’s “Omanisation” policy, which requires private companies to employ a set quota of Omani nationals. India sought and secured safeguards to protect its expatriate workforce, over 480,000 strong, from adverse impacts of future policy changes.
Oman is a dependable supplier of crude oil, LNG and fertilizers. Tariff cuts on these imports will lower costs for Indian refiners, power producers and farmers, strengthening India’s energy security and reducing vulnerability to price volatility and supply disruptions.
Situated near the Strait of Hormuz, through which 20 per cent of global oil shipments pass, Oman holds strategic global significance. Closer economic ties are expected to bolster trust, enabling enhanced defense cooperation, maritime security initiatives and joint infrastructure projects.
The CEPA will also help India consolidate its position as a preferred Gulf partner at a time when China is expanding its economic footprint in the region.
