India-Oman CEPA Comes Into Force, Protects Key Domestic Sectors from Import Surge

India has carefully protected several sensitive sectors of its economy under the India-Oman Comprehensive Economic Partnership Agreement (CEPA), which became operational on June 1.

While the agreement is expected to significantly boost bilateral trade and strengthen economic ties between the two nations, India has ensured that critical domestic industries remain insulated from excessive import competition.

Officials familiar with the agreement stated that India has excluded more than 2,780 tariff lines from tariff liberalisation commitments under the trade pact.

These exclusions cover strategic sectors including gold and silver bullion, jewellery, dairy products, tea, coffee, tobacco, cereals, fruits, vegetables, spices, and various animal-origin products.

The CEPA is being viewed as a balanced trade agreement that promotes exports while safeguarding domestic manufacturing and agricultural interests.

Why India Chose a Protective Approach

Safeguarding Farmers and Domestic Industries

India has offered tariff liberalisation on 77.79% of its more than 12,550 tariff lines. These concessions cover 94.81% of India's imports from Oman by value. However, policymakers have deliberately maintained protections in sectors considered critical for employment, food security, and manufacturing competitiveness.

According to officials, India has placed 2,789 tariff lines in the exclusion category. These include transport equipment, major chemicals, agricultural products, and products derived from animals.

Sensitive manufacturing sectors such as rubber, leather, textiles, footwear, petroleum oils, and mineral-based products have also been protected to preserve India's industrial competitiveness.

One official explained, “Strategic agricultural products such as dairy, meat, cereals, oilseeds, vegetable oils and sugar remain excluded. Jewellery, precious and non-ferrous metals and petroleum products are also protected.”

Tariff Rate Quotas Introduced for Sensitive Products

Balanced Market Access Mechanism

India has also introduced tariff-rate quotas (TRQs) for certain sensitive products such as marble, dates, petrochemicals, and plastics.

A TRQ allows imports of specified quantities at concessional duty rates while imposing higher tariffs once the quota is exhausted. This mechanism helps maintain a balance between trade liberalisation and domestic market protection.

Importantly, unlike India's trade agreement with the UAE, the Oman CEPA does not provide concessional import access for gold and other precious metals.

This distinction reflects India's cautious approach towards precious metal imports, which can have implications for trade balances and domestic industries.

Major Gains for Indian Exporters

Near-Complete Duty-Free Access to Omani Market

One of the most significant achievements of the CEPA is the extensive market access secured for Indian exporters.

The agreement grants almost 100% duty-free access to Indian goods entering Oman. Specifically, it covers 98.08% of Oman's tariff lines and represents 99.38% of India's exports by value.

This is expected to provide a major boost to several export-oriented industries.

Sectors Expected to Benefit

Indian exports likely to gain from the agreement include:

Manufacturing Exports

• Engineering goods
• Transport equipment
• Precision instruments
• Machinery

Agriculture and Food Processing

• Processed food products
• Marine products
• Agricultural commodities

Labour-Intensive Industries

• Textiles
• Apparel
• Gems and jewellery

All zero-duty benefits became applicable from June 1, providing immediate opportunities for Indian exporters to enhance their competitiveness in the Omani market.

Enhanced Opportunities for Indian Professionals

Relaxation Under Omanisation Rules

A key breakthrough during negotiations involved Oman's labour localisation policy, known as Omanisation.

Initially, Oman had reservations regarding the deployment of foreign professionals. However, negotiations resulted in a significant concession.

The country agreed to increase the cap under its Intra-Corporate Transferee (ICT) programme from 20% to 50%.

This change allows Indian companies operating in Oman to deploy a greater proportion of managerial, executive, and specialist personnel than previously permitted.

The agreement also creates more favourable conditions for Indian professionals working in sectors such as:

• Accountancy
• Taxation
• Architecture
• Healthcare
• Allied professional services

These provisions are expected to strengthen India's services exports and professional mobility in the Gulf region.

Strategic Importance of Oman

Gateway to West Asia and Africa

Oman occupies a strategically important position for India's trade and investment ambitions.

Officials noted that Oman serves as a critical gateway for Indian goods and services to wider West Asian and African markets. The availability of ample land and industrial infrastructure in Oman also creates opportunities for Indian companies to establish value-added manufacturing and re-export operations.

Rules of origin provisions under the CEPA will facilitate such investments while ensuring genuine economic activity within Oman.

Growing Bilateral Trade Relationship

Trade Crosses $11 Billion

Economic ties between India and Oman have strengthened steadily in recent years.

Government data shows that bilateral merchandise trade reached $11.2 billion in FY26, representing a 5.56% increase over $10.61 billion in FY25.

India exported goods worth $4.02 billion to Oman during FY26, while imports from Oman stood at $7.17 billion.

Major Imports from Oman

• Petroleum crude and products ($3.69 billion)

• Chemicals ($943 million)
• Fertilisers ($844 million)
• Salt, sulphur, earth and stone ($506 million)
• Ores, slag and ash ($410 million)
• Plastics ($196 million)

Major Exports to Oman

• Petroleum products ($1.67 billion)

• Chemicals ($405 million)
• Meat, fish and dairy products ($159 million)
• Cereals ($174.4 million)
• Fruits, vegetables and nuts ($82 million)
• Coffee, tea and spices ($23 million)
• Machinery, ships, boats, iron and steel ($746.79 million)

Conclusion

The India-Oman Comprehensive Economic Partnership Agreement represents a carefully calibrated trade framework that balances market access with domestic protection. While Indian exporters gain unprecedented duty-free access to the Omani market, critical sectors such as agriculture, precious metals, dairy, textiles, and manufacturing remain shielded from excessive import competition.

The agreement is expected to strengthen bilateral trade, expand opportunities for Indian businesses and professionals, and deepen India's economic engagement with the Gulf region. As global trade dynamics continue to evolve, the India-Oman CEPA could emerge as a strategic model for future trade agreements that promote growth while safeguarding national economic interests.