India, Oman ink free trade agreement: Here are the highlights of the deal

Muscat:  India and Oman signed a free trade agreement on Thursday, which will provide duty free access to 98 per cent of India's exports including textiles, agri and leather goods in Oman.On the other hand, India will reduce tariffs on Omanese products such as dates, marbles and petrochemical items. The deal is expected to come into force from the first quarter of next fiscal. The pact is coming at a time when India is facing steep 50 per cent tariffs in its largest export destination, the US.

The following are the highlights of the India-Oman free trade agreement signed on Thursday:

It is officially called CEPA (Comprehensive Economic Partnership Agreement).

Oman has offered zero-duty access on 98.08 per cent of its tariff lines, covering 99.38 per cent of India's exports to Oman.

First-ever commitment by any country on traditional medicine across all modes, opening significant opportunities for India’s Ayush and wellness sectors.

All major labour-intensive sectors, including gems & jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agricultural products, engineering products, pharma, medical devices, and auto, receive full tariff elimination.

Immediate tariff elimination is being offered on 97.96 per cent tariff lines.

India is offering tariff liberalisation on 77.79 per cent of its total tariff lines (12,556), which covers 94.81 per cent of India's imports from Oman by value.

For products of export interest to Oman and which are sensitive to India, the offer is mostly a tariff-rate quota (TRQ) based tariff liberalisation.

No duty concessions for sensitive products - agri products, including dairy, tea, coffee, rubber, and tobacco products; gold and silver bullion, jewellery; footwear, sports goods; and scrap of many base metals.

Fast tracking of marketing authorisations for pharmaceutical products approved by the USFDA, EMA, and UKMHRA, among others.

SERVICES:

Oman's global services imports stand at USD 12.52 bn, while India's share is just 5.31 per cent.

Data reflects significant untapped potential for Indian service providers.

Oman extends substantial commitments across a broad spectrum of sectors, including computer-related services, business and professional, audio-visual, R&D, education and health services.

For the first time, Oman offers wide-ranging commitments under Mode 4 (movement of professionals).

Notable increase in quota for Intra-Corporate Transferees from 20 per cent to 50 per cent, 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.

More liberal entry and stay conditions for skilled professionals in key sectors, such as accountancy, taxation, architecture, and medical.

CEPA provides for 100 per cent FDI by Indian companies in major services sectors in Oman.

Both agreed to hold future discussions on social security coordination, once Oman's contributory social security system is implemented.

GENERAL INFO:

This is the first bilateral agreement that Oman has signed with any country since the US in 2006.

Bilateral trade stands at over USD 10 billion in 2024-25.

Oman is an important strategic partner in the Gulf region and is a key gateway for Indian goods and services to the wider Middle East and Africa.

Nearly 7 lakh Indian nationals reside in Oman, including Indian merchant families, for over 200-300 years.

Over 6,000 Indian establishments operating across sectors in Oman.

Annual remittances of around USD 2 billion from Oman.

This is the second trade pact signed in the last 6 months, after the UK.