Indo–Oman CEPA in force: India's Leather, footwear gain big GCC edge

The India–Oman Comprehensive Economic Partnership Agreement (CEPA) came into force on Monday, 1st June 2026, marking a defining milestone in bilateral economic relations and opening a transformative new chapter in strategic trade, manufacturing competitiveness, and investment cooperation between the two nations.

The landmark agreement, which provides immediate zero-duty access for 99.38 per cent of India’s exports to Oman by value, is poised to trigger a strong export expansion for India's labour-intensive sectors. For the domestic leather and footwear industry, the trade pact provides a major structural price advantage and a gateway to the wider Gulf Cooperation Council (GCC) and East African markets through Oman’s advanced port infrastructure at Sohar, Duqm, and Salalah.

The historic trade agreement was originally signed on 18th December 2025 in Muscat in the presence of the Hon’ble Prime Minister, Shri Narendra Modi, and His Majesty Sultan Haitham bin Tarik Al Said. Following the prompt completion of internal processes by both sides, the accord was formally operationalised in the presence of the Union Minister of Commerce and Industry, Piyush Goyal, and Issa Saleh Al Shibani, the Ambassador of Oman to India. To mark the entry into force, the first commercial consignments availing of preferential tariff benefits under the agreement, including agricultural products and gems and jewellery shipments from Mumbai, Kolkata, and Chennai, were officially flagged off.

Under the previously applicable Most Favoured Nation (MFN) regime, a mere 15.33 per cent of Indian exports entered Oman duty-free, with footwear and leather products facing standard import duties of up to 5 per cent. The immediate elimination of these tariffs under the CEPA allows Indian footwear and leather manufacturers to compete on an equal footing with global suppliers, while gaining a distinct edge over competitors from nations lacking preferential trade arrangements with the Sultanate.

Prior to this operationalisation, India held its position as only the second nation globally, after the United States, to successfully conclude a comprehensive bilateral trade pact of this magnitude with Oman. The deal covers 98.08 per cent of Oman’s total tariff lines and encompasses goods, services, professional mobility, regulatory cooperation, and robust Non-Tariff Barrier safeguards. Crucially, the agreement has been structured to balance India's export ambitions with domestic sensitivities; products protected under India’s strict exclusion list include specific agricultural commodities, dairy, and domestic leather raw materials, thereby safeguarding the interests of local micro, small, and medium enterprises (MSMEs).

Speaking on the operationalisation of the landmark trade pact, Union Minister of Commerce and Industry, Piyush Goyal, stated:

“The India–Oman CEPA marks a defining milestone in India’s engagement with Oman and reflects Hon’ble Prime Minister Shri Narendra Modi’s vision of forging trade partnerships that deliver gains for farmers, fishermen, youth, women, entrepreneurs and MSMEs. This Agreement will be a force multiplier in the Gulf region. With 99.38 per cent of India’s exports receiving duty-free access, the Agreement unlocks new opportunities for our exporters and professionals gain opportunities. Oman is our trusted partner, a bridge for our people and a gateway to the Gulf and East Africa. Our opportunities will be elevated and CECA will strengthen India’s integration into regional and global value chains. By delivering significant benefits to labor-intensive sectors, it will support job creation, drive investment and enable Indian enterprises to compete on an equal footing with suppliers from countries enjoying preferential market access.”

The strategic timing of the agreement aligns with broader structural shifts in global manufacturing networks. Commenting on the trade architecture, Commerce Secretary, Rajesh Agrawal, added:

“At a time when global trade patterns are being reconfigured by supply-chain diversification, shifting production networks and the emergence of new economic corridors, the CEPA positions India and Oman to leverage these structural changes. By fostering closer integration across trade, services, investment, and logistics, the Agreement creates a framework for more resilient value chains, greater economic competitiveness and a stronger strategic partnership with regional and global relevance. The India-Oman CEPA brings new energy to our bilateral economic engagement, anchored in complementary strengths, deeper regulatory cooperation and a shared commitment to growth. The agreement is tariff liberalization PLUS: it enhances market access, facilitates service trade and provides greater predictability for businesses operating across both markets.”

Bilateral trade between India and Oman reached $11.18 billion in the financial year 2025-26, registering steady upward growth from $10.61 billion in the financial year 2024-25. Beyond immediate tariff reductions on physical merchandise, the CEPA includes breakthrough trade facilitation measures designed to remove historic non-tariff barriers and fast-track market access. Omani ports will now mandatorily accept certificates issued by India’s Export Inspection Council (EIC), eliminating duplicative testing, reducing logistics costs, and providing standardized cargo clearance timelines for Indian exporters.

The agreement also introduces unprecedented gains for the bilateral services sector, which stood at $863 million in 2024 with an Indian surplus of $447 million. Oman has extended its best-ever commitments to India across 127 services sub-sectors, including binding mobility pathways for Indian professionals in engineering, accounting, information technology, and design. Under these enhanced provisions, business visitors can remain in Oman for up to 90 days, independent professionals for up to 180 days, and intra-corporate transferees for up to four years, directly benefiting the nearly 6,000 active India–Oman joint ventures. Future provisions have also been established to negotiate a reciprocal Social Security Agreement to prevent dual contributions for Indian workers.

By establishing a predictable, legally binding economic architecture encompassing trade, investment, logistics, and smart regulation, the pact significantly enhances India's trade footprint across the wider GCC economies. It stands as a pivotal component in India's broader economic journey towards structural integration into global value chains and the long-term manufacturing goals of Viksit Bharat @2047.