India–Oman CEPA Explained: What The Trade Deal Means For Energy, Exports

India and Oman are set to sign a Comprehensive Economic Partnership Agreement (CEPA) in Muscat on Thursday, marking a major step in strengthening bilateral economic ties. The agreement will be signed in the presence of Prime Minister Narendra Modi, who is on a four-day, three-nation tour of Ethiopia, Jordan and Oman.

The CEPA aims to cut or eliminate tariffs on a wide range of goods, ease rules for services trade, and encourage investment flows between the two countries. Negotiations for the pact formally began in November 2023 and were concluded this year.

The signing follows the 14th round of the India–Oman Strategic Consultative Group meeting in Muscat, co-chaired by Arun Kumar Chatterjee and Sheikh Khalifa Alharthy, which reviewed cooperation across defence, trade, energy, investment and people-to-people ties, along with regional and global issues. Commerce and Industry Minister Piyush Goyal has reached Muscat for the signing, while Commerce Secretary Rajesh Agrawal is also expected to be present.

Oman is India’s third-largest export destination in the GCC, after the UAE and Saudi Arabia. India already has a similar trade pact with the UAE, which came into force in May 2022, and talks with Qatar are expected to begin soon.

India–Oman bilateral trade stood at $10.5 billion in FY25, with exports of $4 billion and imports of $6.54 billion.

India’s exports to Oman include mineral fuels, chemicals, precious metals, iron and steel, cereals, ships and boats, electrical machinery, boilers, tea, coffee, spices, apparel and food items.

India’s imports from Oman are dominated by crude oil, LNG, urea, chemicals and aluminium products. Energy and fertilisers account for over 70% of India’s imports from the country. Other imported items include propylene and ethylene polymers, pet coke, gypsum, chemicals, iron and steel, and unwrought aluminium.

India was Oman’s fourth-largest source of non-oil imports and its third-largest market for non-oil exports.

The agreement is expected to improve market access for Indian goods, provide greater certainty on energy supplies, and deepen cooperation in services and investment, broadly following the India–UAE FTA template. It also includes provisions on investment facilitation and regulatory easing.

Strategically, the CEPA strengthens India’s economic and geopolitical footprint in the Gulf. One key aspect to watch will be how India navigates Oman’s ‘Omanisation’ policy, which prioritises local employment while opening up trade and investment.