India, Oman sign free trade agreement; big boost for AYUSH, pharma, mobility of professionals

India and Oman on Thursday signed a Comprehensive Economic Partnership Agreement (CEPA) to deepen bilateral economic integration, provide near-universal duty-free access for Indian goods in the Omani market and unlock new opportunities in services and professional mobility.

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

Market access and tariff concessions

Oman has offered zero-duty access on 98.08% of its tariff lines, covering 99.38% of India’s exports by value.

All major labour-intensive sectors such as textiles, leather, footwear, gems and jewellery, engineering products, plastics, furniture, agricultural products, pharmaceuticals, medical devices and automobiles will get full tariff cut, with immediate benefits on 97.96% of tariff lines.

India, in turn, has offered tariff liberalisation on 77.79% of its tariff lines, covering 94.81% of imports from Oman by value, while keeping sensitive sectors in the exclusion list.

The CEPA is the second free trade agreement signed by India in the last six months after the pact with the United Kingdom and forms part of New Delhi’s strategy to sign trade deals with economies that do not compete with India’s labour-intensive sectors.

A key feature of the agreement is Oman’s ambitious services commitments covering 127 sub-sectors, including computer-related services, business and professional services, audio-visual services, research and development, education and health.

The pact also provides for 100% foreign direct investment by Indian companies in major services sectors in Oman.

Oman, for the first time, has offered wide-ranging commitments under Mode 4, including improved temporary entry and stay provisions for intra-corporate transferees, contractual service suppliers, business visitors and independent professionals, along with liberalised entry for professionals in accountancy, taxation, architecture, medical and allied sectors.

Boost for traditional medicine and pharmaceuticals

Oman has also made the first-ever comprehensive commitment by any country on traditional medicine across all modes of supply, opening new opportunities for India’s AYUSH and wellness sectors and promoting medical value travel.

The CEPA also includes provisions to fast-track marketing authorisations for pharmaceutical products approved by global regulators such as the USFDA and EMA, acceptance of GMP inspection documents, mutual recognition arrangements for Halal certification, acceptance of India’s organic certification and enhanced cooperation on standards and conformity assessment.

"This is a balanced and ambitious agreement that will boost bilateral trade, strengthen supply chains, create employment, and deepen long-term economic partnership, in line with India's vision of inclusive and sustainable growth," Goyal said after the signing.

India-Oman bilateral trade stood at about USD 10.5 billion in 2024-25, with exports worth USD 4 billion and imports at USD 6.54 billion.

India’s key imports from Oman include petroleum products and urea, which together account for over 70% of inbound shipments. Other imports include propylene and ethylene polymers, pet coke, gypsum, chemicals, iron and steel, and unwrought aluminium.

India’s exports to Oman include mineral fuels, chemicals, precious metals, iron and steel, cereals, ships and boats, electrical machinery, boilers, tea, coffee, spices, apparel and food items.