India-Oman CEPA 2026: Key Benefits and Business Opportunities for Indian Companies

The India Oman CEPA entered into force on the 1^st of June 2026, marking the creation of a Free Trade Area between the two nations. Beyond opening tariff and export lines to boost trade volumes, CEPA stands as a strategic milestone for the two nations in vastly different ways.

For Oman, this marks it first FTA with a trading partner apart from the United States of America and for India, it provides a geographically strategic springboard for enterprises looking to expand in the GCC countries and explore alternative transit routes bypassing the highly volatile Strait of Hormuz.

Trade Volumes and Strategic Dynamics

Bilateral economic engagement between India and Oman expanded rapidly before the pact, reaching a trade volume of USD 10.61 billion in FY 24-25 and climbing to USD 11.18 billion in FY 25-26. India was a net importer of Omani goods as compared to its exports, driven by its status as the world’s fastest growing major economy and demand for Omani urea, fertilizers, oil and petrochemical inputs. With an estimated total of 6000 India – Oman joint ventures contributing approximately USD 7.5 billion to Oman’s domestic economy, the CEPA intends to provide a robust institutional framework to scale these partnerships and deepen trade ties between the two countries. Oman’s decision to execute the CEPA marks its first bilateral trade deal since 2006 and only its second country specific trade deal or agreement. Spanning 16 specialised chapters and annexures, the agreement provides much needed trade resilience for Indian exporters by providing much needed duty free and direct access to ports located in Salalah and Duqm. These ports serve as strategic duty-free hubs, providing an alternative trade route to the vulnerabilities surrounding the Strait of Hormuz.

Goods Trade

Under the CEPA, Oman has committed to eliminate duties on 98.08% of its tariff lines, directly covering an equivalent of 99.38% of India’s export value to the Sultanate on Day 1. Prior to the CEPA, exporters faced a standard Most Favoured Nation (MFN) treatment of 5-15% duties. The agreement eliminates these duties and aims to deliver tariff advantages over non-FTA competitors.

The benefits for India accrue across sectors:

1. Textiles & Apparel – Immediate 0% duty access across all tariff lines enabling Indian textile hubs a price advantage to capture market share in the Omani market.
2. Engineering Goods & Automotive – Complete duty elimination provides immediate relief to machinery, automotive component and electrical gear exporters driving overall trade volumes in this sector to a targeted USD 1.5 billion path.
3. Gems & Jewellery – Duty removal on studded ornaments and processed gemstones allows preferential access to Oman’s retail markets, firmly positioning Indian artisans in the driver’s seat to raise exports.
4. Agriculture & Marine Products – Zero duty entry across spices, millets, basmati rice, bovine meat and marine goods solidifies India’s dominant market position, leveraging existing market shares that already exceed 90% of existing Omani meat imports.
5. Leather, Construction & Steel – Immediate 0% duty on industrial footwear exports, handbags, steel pipes and ceramic tiles which directly integrate Indian material suppliers into the Omani urban landscape.

India opened 77.79% of tariff lines (94.81% of import value), granting duty-free access to Omani inputs like petrochemicals, fertilizers, aluminum, and minerals to lower domestic costs. However, India excluded sensitive sectors to protect domestic industries, keeping dairy, grains, edible oils, tobacco, bullion, and footwear restricted.

Services & Mobility

Beyond physical trade, CEPA delivers Oman’s most expansive services liberalization concession ever afforded to a bilateral trade partner. It opens 127 sub-sectors, unlocking committed access for Indian service providers to fields such as engineering, healthcare, higher education, financial services and legal consultancy.

Professional mobility receives a major upgrade with benefits aimed across sectors –

1. Intra-Corporate Transferees – The foreign national staffing quota for Indian subsidiaries operating in Oman from 20% to 50% and extending permitted stays up to 4 years.
2. Independent & Contractual Professionals – Individual and contract-based professionals secure entry rights for up to 4 years with independent experts being granted stays for upto 180 days and business visitors being granted fast tracked visas for stays upto 90 days.
3. 100% Subsidiary Ownership -  Allowed Indian firms to establish Omani subsidiaries without local partnership mandates.
4. Government Procurement – National Treatment afforded to wholly owned Indian subsidiaries, allowing them to bid on equal footing on Omani public contracts in IT, Cargo, Port Logistics, healthcare and green hydrogen projects amongst others.
5. Social Security Co-operation – Establishes a bilateral framework to negotiate a future Social Security Agreement that will protect, accumulate and allow for the repatriation of pension contributions for Indian professionals.

Non-Tariff Safeguards & Digital Facilitation

To prevent non-tariff barriers from affecting gains expected to be delivered by trade, the CEPA establishes streamlined regulatory, compliance and customs mechanisms:

• Pharma Accelerated Approvals – Omani health authorities have committed to a 90-day fast track approval for Indian pharmaceutical products holding valid USFDA, UK MHRA or EMA approvals.
• Mutual Recognition - Recognizes testing by the Indian Export Inspection Council and establishes Mutual Recognition Agreements for Halal and Organic certifications.
• Digital Trade Integration – Pre arrival processing and digital Certificate of Origin verification by the TradeConnect platform of the Directorate General of Foreign Trade.
• MSME Support – Establishment of a dedicated SME committee alongside free public web portals to guide smaller enterprises.

These changes are expected to minimize holding time and compliances in high value exports to Oman, providing Indian businesses with a substantial advantage over non-FTA competitors and positioning them favorably in critical sectors.

Leveraging the CEPA: Strategies for Indian Businesses

To convert CEPA preferential treatment into actual realized gains, businesses would need to deploy differentiated strategies across target streams from exports to imports:

Exports & Regional Footprint

• 100% Owned Subsidiary Logistics – Take advantage of 100% FDI to create wholly owned subsidiaries in ports at Salalah and Duqm to establish springboards into the wider GCC.
• Procurement Access - Utilization of National Treatment preferential access to bid for Omani tenders across IT and ITeS, Logistics, Port Operations and major EPC contracts.
• AYUSH & Wellness Expansion – Indian healthcare providers and traditional medicine providers can under wholly owned enterprises set up clinics and expand into chains, supported by the 4-year visa contract for professionals.
• Pharma Fasttrack – Indian Pharma units or manufacturers with USFDA, EU & UK clearance get 90-day fasttrack approvals without duplicate inspections.
• Maintenance, Repair & Overhaul (MRO) – Businesses can expand by either setting up dedicated MRO units or by utilizing existing MRO infrastructure, being able to re-import equipment duty free within 12 months across shipping, defense and logistics, bypassing costly custom duties on the value of the asset.

Imports Leverage

• Raw Materials – Domestic manufacturers transition to Omani raw materials across polymers and petrochemicals, industrial minerals and construction materials – chiefly marble with duties reducing from 40% to 25%.
• Bilateral Cumulation – Omani raw polymers, base metals imported into India are counted as domestic originating content, lowering value addition threshold required for finished product re-export.
• Tariff Rate Quotas in Dry Fruit & Dates – Dry fruit processors and date importers enjoy preferential rates under a tariff rate quota system, slashing duty by 30% under the quota allowing higher margins on distribution.

Conclusion

The entry into force of the India Oman CEPA represents a pivotal moment in both countries trade relationships and volumes. It is a structural turning point in Indian and Middle Eastern trade integration. Access to the wider GCC market through Omani Ports allows for uninterrupted trade flows along with establishing Indian exports as more competitive than the non-FTA signatories. For industries and enterprises, maximizing this pact will now depend on swift operational execution and mastering the compliance and origin rules to build durable regional footprints.

How India Law Offices LLP Can Help

India Law Offices LLP assists Indian businesses with cross-border expansion, investments and commercial opportunities arising from the India–Oman CEPA. We work extensively with our partner law firm in Oman, enabling us to provide coordinated legal and regulatory support in India and Oman, including market entry, local compliance, investment structuring and commercial transactions.

Our assistance includes:

• CEPA Advisory & Eligibility Assessment – Assessing tariff benefits, rules of origin and market-access provisions.

• Oman Market Entry & Expansion – Advising on subsidiaries, JVs and other market-entry structures.

• Cross-Border Transactions – Supporting investments, acquisitions, JVs and strategic partnerships.

• Trade & Regulatory Compliance – Advising on customs, documentation and applicable regulatory requirements.

• FDI, FEMA & Foreign Investment Advisory – Supporting Indian businesses establishing or investing in Oman.

• Commercial Agreements – Drafting and reviewing supply, distribution, agency and other commercial agreements.

• GCC Expansion Strategy – Helping Indian businesses use Oman as a platform for wider GCC expansion.