India signs pact with Oman for duty-free exports; will also allow labour mobility

India signs pact with Oman for duty-free exports; will also allow labour mobility

India and Oman signed a Comprehensive Economic Partnership Agreement (CEPA) on Thursday, under which Oman will provide India duty-free access to 98.08% of its tariff lines, covering 99.38% of India’s exports to Oman.

India, on the other hand, has offered liberalised tariffs on 77.79% of its total tariff lines, covering 94.81% of what India imports from Oman. Apart from tariff removal on merchandise exports, the deal also includes several concessions that are expected to benefit India’s service sector, including in terms of mobility of workers.

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

‘Renewed faith’

India exported merchandise worth $4.06 billion to Oman in 2024-25, which made up 0.93% of India’s total exports that financial year. It imported goods worth $6.5 billion from Oman, comprising 0.91% of India’s total imports.

“The CEPA will infuse the India-Oman partnership in the 21st Century with renewed faith and energy,” Mr. Modi said earlier in the day while speaking at the India-Oman Business Forum. “This is a blueprint for our future. It will give our trade new vigour and new trust for investments and will open the doors of new opportunities in every sector.”

This is the first bilateral agreement that Oman has signed with any country since it signed a deal with the U.S. in 2006. It is also the second deal India has signed with a country in the Gulf Cooperation Council (GCC), the first being with the United Arab Emirates in February 2022.

Mr. Goyal had also pointed out that a trade deal with Oman also served as a gateway for India to the GCC region, eastern Europe, central Asia, and Africa.

Mr. Modi added that the CEPA would create new opportunities for growth, employment and innovation for the youth of both countries.

According to the government’s press release, labour-intensive sectors such as gems and jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agricultural products, engineering products, pharmaceuticals, medical devices, and automobiles will receive full tariff elimination.

India has kept sensitive products such as agricultural goods, including dairy, tea, coffee, rubber, and tobacco products, gold and silver bullion, jewellery, and other labour-intensive products such as footwear, sports goods, and the scrap of many base metals out of the deal.

Mobility of workers

According to the release, a major highlight of the CEPA is the enhanced mobility framework for Indian professionals.

“For the first time, Oman has offered wide-ranging commitments under Mode 4, including 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 two years, with the possibility of a further two-year extension,” it said.

The agreement also provides for more liberal entry and stay conditions for skilled professionals in key sectors, the release added.