India Oman Pact Holds Promises For Farms Factories And Small Businesses

The India–Oman Free Trade Agreement that comes into force from June 1 is a defining milestone in Prime Minister Narendra Modi’s mission to create global pathways to prosperity for India’s students, artisans, women, farmers, fishermen and MSMEs by opening new markets and accelerating job creation.

India has a deep economic and people-to-people connect with Oman, home to nearly 7 lakh Indians, including merchant families whose roots there go back 200–300 years. Indian remittances from Oman amount to about $2 billion annually, while more than 6,000 Indian enterprises operate there.

The Comprehensive Economic Partnership Agreement (CEPA) between the two countries significantly deepens economic and strategic ties. It immediately gives 100 percent duty-free market access in Oman to 98 per cent of tariff lines covering 99.38 per cent of exports. This marks a dramatic improvement over the pre-CEPA system that allowed only 15.3 per cent of India’s exports enter Oman at zero duty. Goods from India that currently face a 5 per cent import duty in Oman, worth about $3.64 billion in exports, will become more competitive.

For India’s MSMEs, the agreement could be transformative asmany sectors that gain from CEPA are dominated by small businesses. Iron and steel, textiles, leather, auto components and industrial equipment are some of the sectors where MSMEs are expected to get large international orders, which will boost production, investment and hiring.

In an era of growing global instability, the CEPA offers Indian exporters a crucial opportunity to diversify markets and reduce dependence on traditional destinations facing economic slowdown and rising trade barriers.

Job creation: The trade pact benefits labour-intensive sectors such as textiles and apparel, leather & footwear, food processing, marine products, gems and jewellery, and select engineering segments, which are major employers in India.

Increased textiles exports to Oman will boost production and create jobs across major clusters such as Tirupur, Surat, Ludhiana, Panipat, Coimbatore, Karur, Bhadohi, Moradabad, Jaipur, and Ahmedabad. Artisans and weavers across India will also gain from higher international demand for their products.

Numerous jobs will also be created in major leather and footwear hubs across India, particularly in Tamil Nadu, Uttar Pradesh and West Bengal as well as parts of Maharashtra, Punjab, Karnataka and Madhya Pradesh among others.

The gems and jewellery sector is another example of how the CEPA will accelerate employment growth. India already has strong capabilities in cut and polished diamonds, gold and silver jewellery, and handmade jewellery production. With tariff barriers removed, Indian exporters will get a decisive competitive edge over European and Asian rivals. The industry estimates that exports to Oman could grow by as much as USD 150 million over the next three years. This is expected to create substantial employment opportunities in jewellery-making clusters across West Bengal, Tamil Nadu, Maharashtra, Rajasthan, and Gujarat.

Farmers and fishermen: To safeguard domestic farmers and sensitive agricultural interests, India has given no tariff concession for major products such as wheat, rice, maize, millets, dairy, fruits, vegetables, edible oils, oilseeds, tea, coffee and honey.

India will get a competitive advantage over rivals in butter, honey, sweet biscuits, eggs and some confectionary products, which will increase demand for the country’s farm produce and boost rural incomes.

The agreement also provides for acceptance and recognition of India’s National Programme for Organic Production (NPOP) certification, which will give enormous opportunities to Indian farmers to sell organic output to Oman, which is a major food importer.

Marine products also have huge untapped potential. Oman’s imports of marine products was about $119 million between 2022 and 2024. Imports from India stood at only $7.75 million, giving enormous opportunities for Indian seafood exports such as shrimp and frozen cuttlefish. The labour-intensive marine products industry is likely to generate additional jobs in fishing, processing, packaging, cold-chain logistics, and export operations.

Pharma and traditional medicine: Indian medicines approved by regulators such as USFDA, EMA, UK MHRA and TGA will receive automatic marketing authorisation in Oman within 90 days — a major win for Indian pharma exporters.

Significantly, CEPA creates opportunities for India’s traditional medicine services. It provides for joint research in traditional medicine.

Services and mobility: Another important dimension of the agreement lies in services and mobility. Oman has undertaken commercially meaningful commitments in sectors of major export interest to India, including professional services, computer and IT services, education, healthcare, tourism, research and development, and environmental services. Indian professionals in areas such as accounting, engineering, medicine, construction, education, and consulting are expected to benefit from improved market access.

Oman has agreed to enhanced mobility commitments for Indian professionals and workers. Intra-corporate transferees and contractual service suppliers will be allowed stays of up to four years, while business visitors and independent professionals will receive easier temporary entry provisions. It has raised the ceiling for intra-corporate transferees from 20 per cent to 50 per cent.

The Modi government’s initiatives to sign trade pacts with developed countries is part of the Prime Minister’s mission to improve the life of every Indian. The agreement with Oman is a reminder that trade is a powerful instrument of growth, job creation and shared prosperity. In a fragmented and protectionist world, PM Modi is sending a clear message that the new, confident India will not retreat behind walls. It will rise through partnerships, competitiveness and global engagement.

The writer is Union Minister of Commerce and Industry, Government of India