India-Oman CEPA Grants 100% FDI to Indian Firms in Key Services, Paves Way for Social Security Talks and Deepens Strategic Economic Ties.

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India and Oman sign a landmark Comprehensive Economic Partnership Agreement (CEPA) that opens services sectors to 100% FDI for Indian firms, offers zero-duty access to most Indian exports, strengthens bilateral trade, and sets the stage for future social security cooperation to support worker mobility.

India and Oman have taken a major step forward in bilateral economic engagement with the signing of the Comprehensive Economic Partnership Agreement (CEPA) on December 18, 2025, during Prime Minister Narendra Modi’s visit to Muscat.

This landmark pact not only liberalises trade and investment between the two nations but also grants 100% foreign direct investment (FDI) to Indian companies in key services sectors and opens the door for future discussions on social security cooperation , a critical facilitator of skilled worker mobility and protections.

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🔹 A Watershed Moment in India-Oman Relations.

The CEPA represents a significant enhancement of the nearly 70-year diplomatic relationship between India and Oman, reinforcing economic linkages and cooperation across several key sectors. Oman, strategically located near the Strait of Hormuz, offers India a gateway into the Gulf Cooperation Council (GCC) region and broader markets in Eastern Europe, Central Asia, and Africa.

🔹 100% FDI and Services Market Access.

One of the standout features of the agreement is that Indian firms can now undertake 100% FDI in major services sectors in Oman, allowing full ownership and commercial presence that was previously limited. This provision spans sectors including professional services, finance, accounting, business consulting, and other high-value services.

Alongside this, Oman has committed to services market access across 127 sub-sectors, with enhanced temporary entry and stay provisions under Mode 4 for professionals such as accountants, architects, medical specialists, and independent professionals.

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🔹 Future Social Security Talks: A Step Towards Mobility.

Crucially, the CEPA paves the way for future talks on social security coordination, an essential framework for protecting the rights and benefits of workers operating across borders. These discussions will be important for Indian professionals and workers in Oman, especially as the Gulf nation implements a contributory social security scheme.

While specific details are yet to be formalised, the mutual intent signals a long-term commitment to facilitating mobility with protections for workers and businesses.

🔹 Trade and Export Gains:

Under the CEPA, India obtains zero-duty access to 98.08% of Oman’s tariff lines, covering 99.38% of Indian export value , a major boost for sectors like textiles, gems and jewellery, pharmaceuticals, engineering goods, and automobiles.

India, in turn, will liberalise tariffs on a broad range of imports from Oman, mostly through tariff reductions and tariff-rate quotas for certain sensitive products.

Economists and exporters point to the agreement’s potential to significantly expand India’s export footprint in the Omani market. Trade is already on the rise, with bilateral trade exceeding $10 billion in 2024-25, and projections indicate export growth could accelerate further in the coming years.

🔹 Strategic Impacts Beyond Trade.

Beyond tariff elimination and investment liberalisation, the CEPA is seen as a strategic counterbalance to global trade uncertainties, including high tariff pressures in other markets. It aligns with India’s broader trade diversification strategy, which has seen a series of agreements with partners such as the United Kingdom and the European Free Trade Association in 2025.

🔹 Looking Ahead.

With implementation expected in the first quarter of the next financial year, the India-Oman CEPA stands as a model for balanced, forward-looking economic cooperation in the region. It not only enhances traditional trade links but also fosters services and investment integration, while setting a foundation for important future negotiations on social security cooperation , a step that could unlock new opportunities for Indian professionals abroad.