Context:

Recently, India and Oman signed a Comprehensive Economic Partnership Agreement (CEPA), a landmark bilateral trade and investment pact aimed at strengthening economic cooperation, boosting trade, and enhancing labour mobility between the two countries.

Key Features of the CEPA:

1. Trade Liberalisation and Duty-Free Access

• • • • Oman will provide India duty-free access to 98.08% of its tariff lines, covering 99.38% of India’s exports to Oman.
      • India has offered liberalised tariffs on 77.79% of its tariff lines, covering 94.81% of imports from Oman.
      • Full tariff elimination is expected for several labour-intensive and high-value sectors, including:
        • Gems and jewellery
        • Textiles and leather
        • Footwear and sports goods
        • Plastics and furniture
        • Agricultural products
        • Engineering goods
        • Pharmaceuticals and medical devices
        • Automobiles

2. Sectoral and Services Benefits

• • • • The CEPA includes significant concessions for India’s services sector, with a strong emphasis on professional mobility.
      • Certain sensitive products remain excluded from the agreement, including:
        • Dairy products
        • Tea and coffee
        • Rubber and tobacco
        • Gold and silver bullion
        • Jewellery
        • Select footwear and sports goods

3. Enhanced Labour Mobility

• • • • Oman has committed to Mode 4 mobility, facilitating greater access for Indian professionals to Omani markets.
      • The quota for Intra-Corporate Transferees (ICTs) has been increased from 20% to 50%.
      • Contractual Service Suppliers are permitted a stay of up to two years, extendable by an additional two years.
      • Entry and stay conditions for skilled professionals have been liberalised in key sectors such as IT, healthcare, engineering, and professional services.

Economic and Strategic Significance:

• • In 2024–25, India exported merchandise worth $4.06 billion to Oman, while imports from Oman stood at $6.5 billion.
  • The CEPA provides India with a strategic gateway to the GCC region, as well as access to Eastern Europe, Central Asia, and Africa, thereby enhancing trade diversification.
  • This agreement marks:
    • Oman’s first bilateral trade agreement since its FTA with the United States in 2006, and
    • India’s second CEPA with a GCC country, following the India–UAE CEPA signed in 2022.

Implications of the CEPA:

• • Trade Growth: Reduced tariffs and expanded market access are expected to significantly boost India’s exports, particularly in labour-intensive and high-value manufacturing sectors, leading to higher bilateral trade volumes.
  • Employment and Skills Development: Enhanced labour mobility will generate new employment opportunities for Indian professionals and facilitate skill transfer in sectors such as IT, healthcare, engineering, and technical services.
  • Strategic Partnership: Deepening economic ties with Oman strengthens India’s strategic footprint in West Asia, complements its Act West policy, and enhances regional connectivity and energy-security cooperation.
  • Youth and Innovation: The CEPA is expected to open new avenues for entrepreneurship, innovation, and start-up collaboration, particularly benefiting the youth in both countries, in alignment with India’s demographic and economic aspirations.

Conclusion:

The India–Oman CEPA represents a historic step in bilateral economic cooperation by integrating trade liberalisation, services sector access, and labour mobility into a single comprehensive framework. By enabling duty-free market access, liberalised tariffs, and professional mobility, the agreement strengthens economic, strategic, and people-to-people ties. Its effective implementation is expected to boost trade, generate employment, and enhance India’s regional influence, serving as a template for future comprehensive economic partnerships.