India-Oman Comprehensive Economic Partnership Agreement (CEPA)
The India-Oman CEPA, anticipated to be effective soon, aims to enhance India's export capacity, nearly doubling the current shipments to Oman.
Trade and Export Opportunities
- India's exports to Oman have been around $4 billion since FY23.
- The CEPA offers tariff concessions, broadening India's export basket, currently dominated by energy products.
Key Features of the Agreement
- Signed in December 2023 after negotiations that started the same year.
- Provides duty-free access to 98% of tariff lines, covering 99% of India's exports to Oman.
- Muscat commits to zero-duty access in sectors like:
- Pharmaceuticals
- Engineering goods
- Chemicals
- Gems and jewellery
- Textiles
- Expected to diversify exports beyond petroleum.
- Exports worth $3.64 billion currently facing duties up to 5% will become duty-free.
Strategic and Economic Significance
- Oman's location offers an alternative maritime gateway to GCC markets, bypassing the Strait of Hormuz.
- India’s exports to GCC, which account for 12% of total outbound shipments, declined by 35% due to regional conflicts.
India’s Concessions and Exclusions
- India offers duty concessions on 78% of tariff lines.
- Exclusions for sensitive sectors such as:
- Rubber and leather
- Textiles and footwear
- Petroleum oils and mineral-based products
- Key domestic sectors excluded:
- Transport equipment
- Major chemicals
- Cereals, spices, coffee, and tea
- Animal-origin products, dairy, oilseeds, and edible oils
- Honey, fruits, and vegetables
