India-Oman Comprehensive Economic Partnership Agreement (CEPA)

Syllabus: GS2/ International Relation

In News

• The India–Oman Comprehensive Economic Partnership Agreement (CEPA) came into force on 1 June 2026, creating one of India’s most comprehensive trade agreements in the Gulf region.

What is a CEPA?

• A CEPA goes beyond a traditional Free Trade Agreement (FTA). While traditional FTAs focus narrowly on goods, a CEPA links two economies with broad commitments, covering preferential trade in goods, liberalisation of services, investment protection, intellectual property rights, competition policy and government procurement.

Key Features of India–Oman CEPA

• Massive Market Access for Indian Exports: Duty-free access on 99.38% of India’s exports, compared to only 15.33% under the MFN regime.
  • Oman is India’s second-largest trading partner in the Gulf region and serves as a strategic gateway to the wider GCC market through its advanced port infrastructure. 
  • Bilateral trade between India and Oman reached $11.18 billion in FY 2025-26, up from $10.61 billion in FY 2024-25.
• Strong Services Liberalisation: Oman has opened 127 service sub-sectors, the most comprehensive offer by any GCC country to India. 100% FDI for Indian companies in the major services sector in Oman.
• Trade Facilitation Measures: Oman will accept certificates issued by India’s Export Inspection Council (EIC). This would reduce testing delays and lower transaction costs for exporters.

Significance

• Strategic location of Oman: Unlike most Gulf countries which depend on shipping through the Strait of Hormuz, much of Oman’s coastline lies directly on the Arabian Sea and the Gulf of Oman. This means ports like Salalah and Duqm remain accessible even when Hormuz traffic is disrupted.
• Gateway to GCC and East Africa: Oman’s logistics hubs at Sohar, Duqm and Salalah give Indian exporters enhanced access not only to Oman but also to wider GCC and East African markets.
  • Oman is India’s second-largest trading partner in the Gulf region and serves as a strategic gateway to the wider GCC market through its advanced port infrastructure.
• India’s Gulf Strategy: India becomes only the second country after the United States to secure a comprehensive bilateral trade pact with Oman.
• MSME and Employment: A calibrated liberalisation approach protects sensitive sectors while supporting MSMEs, labour-intensive industries, and region-wide export growth.

Source: TH