After UK, India inks second free trade deal with Oman
India and Oman on Thursday elevated their long-standing bilateral partnership with the signing of a Comprehensive Economic Partnership Agreement (CEPA), as Prime Minister Narendra Modi held extensive talks with Sultan Haitham bin Tarik in Muscat during a landmark visit marking 70 years of diplomatic relations between the two countries.
The India-Oman CEPA is the second free trade agreement signed by India in the last six months, after the pact with the United Kingdom, and reflects New Delhi’s broader strategy of pursuing high-quality trade agreements with key economies that complement, rather than compete with, India’s labour-intensive sectors.
Prime Minister Modi, who was accorded a ceremonial welcome at the Royal Palace, held discussions with the Omani ruler in both one-on-one and delegation-level formats. The two leaders undertook a comprehensive review of the India–Oman Strategic Partnership, noting steady progress across political, economic, defence and people-to-people ties.
Describing the CEPA as a landmark in bilateral relations, the leaders said the agreement would significantly boost trade and investment flows. With bilateral trade already crossing $10 billion and two-way investments on an upward trajectory, Modi underlined that the pact would expand market access, generate employment and unlock new business opportunities in both countries.
Commerce and Industry Minister Piyush Goyal and Oman’s Minister of Commerce, Industry and Investment Promotion Qais bin Mohammed Al Yousef signed the agreement. Under the CEPA, Oman has offered zero-duty access on 98.08 per cent of its tariff lines, covering over 99 per cent of India’s exports by value. All major labour-intensive sectors -- including textiles, gems and jewellery, leather, footwear, sports goods, engineering products, pharmaceuticals, medical devices and automobiles -- will receive full tariff elimination, most of it with immediate effect.
India, in turn, has offered tariff liberalisation on nearly 78 per cent of its tariff lines, covering close to 95 per cent of imports from Oman by value, while protecting sensitive sectors such as agriculture, dairy, precious metals and select labour-intensive products through exclusions or tariff-rate quotas.
Energy cooperation featured prominently in the talks, with both sides agreeing to give fresh momentum to long-term energy arrangements, renewable energy collaboration, and projects in green hydrogen and green ammonia. Modi welcomed Oman’s decision to join the International Solar Alliance and invited it to participate in the Coalition for Disaster Resilient Infrastructure and the Global Biofuel Alliance.
The leaders also identified agriculture, education and services as priority areas. Cooperation in agricultural science, animal husbandry, aquaculture and millet cultivation was discussed, alongside faculty and researcher exchanges to deepen academic linkages. The CEPA includes a comprehensive services package, opening opportunities for Indian professionals in sectors such as IT, business and professional services, healthcare, education, research and development, and audio-visual services.
A key highlight is enhanced mobility for Indian professionals, with Oman committing to higher quotas and longer stays for intra-corporate transferees and contractual service suppliers, as well as more liberal entry conditions for skilled professionals. The agreement also allows 100 per cent foreign direct investment by Indian companies in major services sectors in Oman.
The two leaders reaffirmed their commitment to strengthening defence and maritime security cooperation, reflecting shared interests in regional stability. Modi thanked Sultan Haitham for his support to the nearly seven lakh-strong Indian community in Oman and said new initiatives in maritime heritage, youth exchanges, language promotion and sports would further strengthen people-to-people ties.
