India–Oman CEPA sealed: India gets duty-free access to 99.38% of its exports

The recently concluded Comprehensive Economic Partnership Agreement (CEPA) between India and Oman marks a significant milestone in India's economic diplomacy and its strategic engagement with the Middle East. This pact, which grants India duty-free access for an impressive 99.38% of its total exports to Oman, is not merely a trade deal but a testament to the deepening bilateral relations and India's ambitious foreign trade strategy.

**The Genesis of Partnership: India-Oman Relations**

India and Oman share a historical relationship rooted in ancient maritime trade links and cultural exchanges. Oman, strategically located at the mouth of the Strait of Hormuz, has always been a crucial partner for India, particularly concerning energy security and maritime trade routes. In recent decades, this relationship has evolved into a robust strategic partnership encompassing defence, security, and economic cooperation. India's 'Act West' policy, which succeeded the 'Look West' policy, emphasizes strengthening ties with countries in West Asia and North Africa, with the Gulf Cooperation Council (GCC) countries being central to this outreach. The pursuit of a CEPA with Oman aligns perfectly with this policy, building on the success of similar agreements with the UAE and Australia, and signalling India's intent to diversify and deepen its trade relationships beyond traditional partners.

**The India-Oman CEPA: A Game-Changer**

The core of the India-Oman CEPA is the substantial market access it provides. By ensuring duty-free entry for nearly 99.38% of Indian exports, the agreement aims to significantly reduce trade barriers and make Indian goods more competitive in the Omani market. This covers a wide array of sectors, potentially including agricultural products, textiles, chemicals, machinery, and pharmaceuticals. Beyond goods, CEPAs typically encompass trade in services, investment facilitation, dispute settlement mechanisms, and cooperation in various economic areas, fostering a more integrated economic partnership. While specific details on services and investment are usually elaborated upon in the full text, the primary focus highlighted is the significant reduction in tariffs for goods.

**Key Stakeholders and Their Roles**

The primary stakeholders in this agreement are the **Government of India**, represented by the Ministry of Commerce & Industry, and the **Government of Oman**. Their respective negotiation teams have worked to iron out the details and ensure mutual benefit. For India, the **Indian exporting community** across various sectors stands to gain immensely from reduced tariffs, leading to increased demand and potentially higher profits. **Indian manufacturers** will find new avenues for growth, supporting initiatives like 'Make in India'. Conversely, **Omani businesses and consumers** will benefit from a wider range of competitively priced Indian goods and services. The agreement also involves **logistics and shipping companies** that facilitate the movement of goods, and **financial institutions** that support trade and investment flows between the two nations.

**Significance for India: Economic and Strategic Imperatives**

This CEPA holds multi-faceted significance for India. **Economically**, it is expected to boost India's exports, helping to narrow the trade deficit and contribute to economic growth. Enhanced market access supports domestic industries, potentially leading to job creation and technological advancements. It provides India with a crucial gateway to the broader Middle Eastern and African markets. **Strategically**, the agreement strengthens India's presence and influence in a geopolitically vital region. Oman is a reliable partner for India's energy security, being a significant supplier of crude oil and natural gas. Deepening economic ties further solidifies this energy partnership. Moreover, the CEPA reinforces India's 'Act West' policy, enhancing its engagement with the GCC and contributing to regional stability and economic integration. This move underscores India's commitment to building a network of strong economic partnerships globally.

**Constitutional and Policy Framework**

The power of the Indian executive to enter into international treaties and agreements is derived from the Constitution of India. While there isn't a single specific article that explicitly outlines this, the **Executive Power of the Union (Article 73)** implicitly covers the ability of the Union government to conduct foreign affairs, including signing treaties. Furthermore, subjects like 'foreign affairs', 'entering into treaties and agreements with foreign countries and implementing of treaties, agreements and conventions with foreign countries' fall under **Entry 14 of the Union List** in the Seventh Schedule. 'Trade and commerce with foreign countries; import and export across customs frontiers; customs duties' are covered under **Entry 41 of the Union List**. These entries empower the Parliament to legislate on these matters and the Executive to implement them. The CEPA aligns with India's broader **Foreign Trade Policy**, which aims to promote exports, diversify markets, and integrate India into the global economy. It also supports national initiatives like 'Make in India' and 'Aatmanirbhar Bharat' by providing market access for domestically produced goods.

**Future Trajectories and Implications**

The India-Oman CEPA is anticipated to usher in a new era of bilateral cooperation. In the short term, we can expect a surge in trade volumes and increased business-to-business interactions. In the long term, it could lead to greater foreign direct investment (FDI) in both directions, particularly in sectors like infrastructure, logistics, manufacturing, and technology. This agreement sets a precedent for India's ongoing negotiations with other potential trade partners and reinforces its position as a proactive player in shaping global trade architecture. It also highlights India's strategy of forging robust bilateral trade agreements as a complement to its multilateral engagements, fostering economic resilience and strategic autonomy. The success of this CEPA will likely encourage further exploration of similar agreements with other GCC members, solidifying India's economic footprint in the region.