Within six months of signing an ambitious trade deal with the United Kingdom, India has signed another trade deal with a Middle Eastern nation – Oman. New Delhi on Thursday (December 18, 2025) formally signed a Comprehensive Economic Partnership Agreement (CEPA) in Muscat.
The historic accord marks the beginning of a “new era” of economic opportunity, solidifying India’s strategic footprint in the Gulf region. The agreement was signed by Union Minister of Commerce and Industry Piyush Goyal and Oman’s Commerce Minister HE Qais bin Mohammed Al Yousef.
India-Oman FTA give a zero-duty access to almost 99% of Indian exports along with permitting 100% Foreign Direct Investment (FDI) for Indian firms in Oman.
India-Oman FTA: Why is it important for labour markets?
The India-Oman CEPA is a powerhouse for merchandise trade, offering zero-duty access on 98.08% of Oman’s tariff lines. This covers a staggering 99.38% of India’s exports by value. For Indian manufacturers, this means immediate tariff elimination on nearly 98% of product categories.
Crucially, the deal is designed to empower India’s labour-intensive sectors. Industries such as textiles, leather, footwear, gems and jewellery, and furniture are set to benefit from unprecedented market access. This is expected to generate significant employment, particularly for artisans, MSMEs, and women-led enterprises.
Moreover, engineering products, pharmaceuticals, and automobiles also stand to gain a competitive edge in the Omani market.
What else does the FTA entails?
Beyond physical goods, the agreement breaks new ground in the services sector. In a move described as the “first of its kind” for Oman, the Sultanate has opened 127 sub-sectors to Indian service providers.
The package includes high-growth areas such as IT, accountancy, taxation, architecture, health and education services, research and development and audio-visual services. The agreement also guarantees 100% Foreign Direct Investment (FDI) for Indian companies in major service sectors through commercial presence.
Enhanced mobility for professionals
One of the most significant triumphs of the CEPA is the “Mode 4” framework, which facilitates the movement of people. For the first time, Oman has committed to high-quality entry and stay provisions for Indian professionals.
This includes a notable increase in the quota for Intra-Corporate Transferees from 20% to 50%, together with a longer permitted duration of stay for Contractual Service Suppliers, extended from the existing 90 days to 2 years.
In a world-first, the agreement includes a dedicated commitment to Traditional Medicine. This opens a gateway for India’s AYUSH (Ayurveda, Yoga, Unani, Siddha, and Homoeopathy) and wellness sectors, promoting “medical value travel” and strengthening healthcare cooperation.
Furthermore, Indian pharmaceutical exporters will see reduced costs and faster market access. The agreement provides for the fast-tracking of marketing authorisations for products already approved by major global regulators like the UKMHRA, USFDA, and EMA.
Worth noting here is that the India-Oman FTA is our second major Free Trade Agreement in just six months, following the landmark pact with the UK. While the deal is ambitious, it remains balanced. India has maintained an “exclusion category” for sensitive products to protect domestic interests, particularly in dairy, tea, coffee, tobacco.
With bilateral trade already exceeding $10 billion, and a resident Indian community of 700,000 contributing to the local fabric, this CEPA transforms a millennia-old relationship into a modern economic engine. As Minister Piyush Goyal noted, the agreement is not just about trade, it is about “inclusive growth” and a shared future of prosperity.