India-Oman CEPA grants 100% FDI to Indian firms in key services, paves way for social security talks

Total trade between India and Oman stood at $10.61 billion in 2024-25, a growth of 18.6 percent on-year.

The trade deal between India and Oman, signed on December 18, allows Indian companies to fully invest in key services sectors and includes plans for future talks on social security to support worker mobility and protection.

"The (India-Oman) Comprehensive Economic Partnership Agreement (CEPA) provides for 100 percent Foreign Direct Investment (FDI) by Indian companies in major services sectors in Oman through commercial presence, opening a wide avenue for India’s services industry to expand operations in the region," the commerce ministry said in a statement.

Both sides have also agreed to hold future discussions on social security coordination once Oman’s contributory social security system is implemented, reflecting a forward-looking approach to facilitating labour mobility and worker protection.

The CEPA already provides for easier mobility for Indian professionals as Oman has increased the quota for intra-corporate transferees to 50 percent from 20 percent and extended the stay for contractual service suppliers from 90 days to two years, with a possible two-year extension.

The agreement also relaxes entry and stay rules for skilled workers in sectors like accountancy, taxation, architecture, and healthcare.

The trade deal between India and Oman was signed on the second day of Prime Minister Narendra Modi's visit to the Gulf country, giving most Indian exports, including textiles, duty-free access.

Under the CEPA, India gains zero-duty access on 98.08 percent of Oman’s tariff lines, covering 99.38 percent of Indian exports, while New Delhi will cut duties on about 78 percent of its tariff lines, covering nearly 95 percent of imports from Muscat, with sensitive products mostly handled through tariff-rate quotas.

Talks for the trade agreement between the two countries began in November 2023 and concluded in August 2025 after five rounds of negotiations.

Total trade between India and Oman stood at $10.61 billion in 2024-25, a growth of 18.6 percent on-year.

The pact with Oman is the second Free Trade Agreement signed in the last six months, after the one with the United Kingdom, and is part of a strategy to secure deals with developed economies that do not compete with India’s labour-intensive sectors while offering growth opportunities for Indian businesses.