India sees $3.6 billion in tariff-free exports to Oman under CEPA, with a $21.2 billion market potential

Oman is India's third-largest export destination among the Gulf Cooperation Council (GCC) countries.

Exports from India to Oman worth $3.64 billion, which currently face a 5 percent duty, are expected to gain a significant boost with zero-duty concessions once the trade deal between the two sides kicks in.

According to the commerce ministry, the estimated export potential to Oman could be as high as $21.2 billion, which reflects a medium to long-term opportunity based on average trade patterns during 2022–24 owing to tariff reductions and regulatory easing under the trade deal.

The highest export potential lies in minerals at about $7.3 billion, machinery at $3.7 billion, base metals at $2.9 billion, chemicals at $1.6 billion and transport equipment at $1.9 billion, followed by plastics and rubber at $1.2 billion, processed food at $0.8 billion, and textiles at $0.4 billion.

The India-Oman trade agreement grants duty free access to over 99 percent of Indian exports covering 98.08 percent of Oman’s tariff lines.

Labour-intensive goods such as textiles, transport equipment, precision instruments, processed food, and gems and jewellery, which currently face tariffs of over 50 percent in the United States, are expected to benefit from diversification opportunities arising from the trade deal with Oman.

The CEPA also offers streamlined regulatory procedures, reduced compliance burdens, and faster market entry, tapping into Oman’s $28 billion import market.

All zero-duty concessions will apply from day one of the agreement’s entry into force, compared with the current most-favoured-nation (MFN) regime under which only 15.33 percent of export value and 11.34 percent of tariff lines, based on the 2022–2024 average, enter Oman at zero duty.

India and Oman signed the Comprehensive Economic Partnership Agreement (CEPA) on December 18, the second day of Prime Minister Narendra Modi’s visit to the Gulf nation.

During 2024‑25, bilateral merchandise trade between India and Oman reached $10.61 billion, up from $8.94 billion in 2023‑24, and during April–October 2025 it stood at $6.48 billion.

Engineering goods

Oman is a key market for India’s engineering exports, with shipments worth $875.83 million in 2024–25, and the CEPA provides duty-free access for products in this category, replacing Most Favoured Nation tariffs of up to 5 percent.

With tariff elimination, engineering exports are projected to rise to $1.3–1.6 billion by 2030, driven by stronger competitiveness in iron and steel, electrical machinery, industrial equipment, motor vehicles, and copper products.

The agreement also supports micro, small, and medium enterprises by improving price competitiveness and supply chain integration, while positioning Oman as a strategic gateway for Indian engineering exporters to diversify beyond protectionist markets such as the United States and the European Union and Mexico into the and the Gulf Cooperation Council countries and the wider Middle East.

Marine products

Under the CEPA with Oman, Indian marine products that earlier faced import duties of 0–5 percent will receive immediate duty-free access, significantly improving their price competitiveness.

Oman imported $118.91 million worth of marine products during 2022–24 but sourced only $7.75 million from India. The gap is particularly evident in categories such as Vannamei shrimp and frozen cuttlefish, where India’s exports to Oman remain a fraction of its global shipments, indicating strong export and employment potential in this labour-intensive sector.

Electronics goods

Oman imported electronic goods worth $3 billion in 2024, while India’s exports accounted for only $123 million, highlighting significant scope for deeper engagement.

Major imports include smartphones, photovoltaic cells, telecom instruments and parts, boards and cabinets for electric control or distribution, and static converters, with India already maintaining a relatively stronger presence in boards, cabinets, and static converters.

The top ten electronic products make up an Omani market of about $2 billion. Duty-free access and stable tariffs under the CEPA give Indian exporters a chance to grow their share in these key segments.

Chemicals exports

Oman imported $3.13 billion worth of chemicals in 2024, while India supplied only $169.41 million, indicating substantial room to expand market share under the trade agreement.

Immediate zero-duty access for key chemical chapters, including inorganic, organic, and chemical products, removes the 5 percent tariff, improving margins and certainty for Indian exporters.

Duty reductions of up to 5 percent on other chapters, covering dyes, tanning extracts, soaps, essential oils, and industrial preparations, provide a clear price advantage over competitors that do not have a trade deal with Oman.

With India’s global chemical exports at $40.48 billion, even modest growth in Oman can deliver significant gains, particularly for SMEs.

The trade deal also positions Oman as a strategic partner for secure inputs, industrial co-location, and green feedstock, enabling Indian firms to leverage ports and SEZs, co-invest in green hydrogen and petrochemicals, and strengthen value chains across the Gulf and African markets.

Gems & Jewellery

India’s trade deal with Oman eliminates duties of up to 5 percent on all gem and jewellery products, opening significant market potential.

In 2024, India exported only $35 million worth of gems and jewellery to Oman, compared with Oman’s total imports of $1.07 billion, highlighting strong opportunities for growth.

With improved market access, India is expected to increase exports by up to $150 million over the next three years, particularly in cut and polished diamonds, gold and silver jewellery, platinum, and imitation jewellery, while also creating substantial employment in jewellery-making clusters across West Bengal, Tamil Nadu, Maharashtra, Rajasthan, and Gujarat.

India's offer

India’s final goods market access offer to Oman under the Comprehensive Economic Partnership Agreement (CEPA) covers 12,556 tariff lines, with phased duty eliminations across key commodities.

Total Elimination of Import Duties (TEI) includes crude petroleum oil, urea, liquefied natural gas, motor gasoline, liquefied propane and butanes, naphtha, sulphur, iron ore, p-xylene, toluene, and vessels other than rowing boats.

Tariff Elimination over a Period (TEP) applies to products such as petroleum bitumen, automotive diesel fuel, aluminium ingots, limestone, cement clinkers, high-speed diesel fuel, vacuum gas oil, beauty and skin care preparations, and unwrought aluminium. Duties on some items will be phased out over 10 years, while others will be removed over five to seven years.

Other modalities include Tariff Rate Quotas (TRQ) for polyethylene, polypropylene, ethylene glycol, aluminium alloy billets, marble, PET flake, and polyvinyl chloride, while certain items are excluded, including aeroplanes, raw petroleum coke, perfumes, turbo jets, oil extraction machinery, aluminium scrap, and copper scrap.

India has also excluded dairy, gold, and certain key agricultural products from tariff concessions in the trade deal with Oman.

As part of the trade deal, India will cut duties on about 78 percent of its tariff lines, covering nearly 95 percent of imports from Oman, with sensitive products given access mainly through tariff-rate quotas.