The recent signing of the Comprehensive Economic Partnership Agreement (CEPA) between the Sultanate of Oman and the Republic of India is being hailed as a landmark achievement, poised to dramatically reshape the economic landscape of both nations. Experts predict this Oman India CEPA will unlock significant opportunities for trade expansion, investment growth, and crucial economic diversification for Oman, moving it closer to the goals outlined in Oman Vision 2040. This agreement isn’t just about increased trade volumes; it’s a strategic realignment with far-reaching implications.
A Strategic Turning Point for Oman’s Economy
Economists and business leaders across Oman have uniformly affirmed the CEPA’s potential to be a game-changer. Dr. Said Mubarak Said AL Muharrami, Member of the Board of Directors of the Central Bank of Oman and Professor of Finance at Sultan Qaboos University, emphasized that the agreement will substantially increase trade through reduced tariffs and streamlined processes. This, in turn, will stimulate direct investment and foster growth in key sectors. The anticipated benefits extend beyond simply boosting existing industries; the CEPA is expected to encourage technology transfer and create much-needed employment opportunities, ultimately contributing to a higher GDP.
Key Sectors Poised for Growth
Several sectors are expected to experience particularly strong growth as a result of the Oman India trade agreement. These include petrochemicals, industry, renewable energy, information technology, fisheries, minerals, and light manufacturing. The agreement’s provisions are designed to facilitate the flow of goods and services, making Omani products more competitive in the vast Indian market. Furthermore, the CEPA is expected to bolster Oman’s position as a vital regional hub for trade and supply chains.
Boosting Omani Industries and SMEs
The Oman Manufacturers Association, under the leadership of Chairman Dr. Hilal bin Abdullah Al Hinai, has enthusiastically welcomed the CEPA. Dr. Al Hinai highlighted the significant opportunities it presents for Omani industries, particularly in manufacturing, petrochemicals, building materials, food processing, metals, and pharmaceuticals, to access the burgeoning Asian markets. The association is committed to supporting industrialists by clarifying market access mechanisms and fostering stronger collaboration with the Indian private sector.
A crucial aspect of the agreement, as emphasized by Dr. Al Hinai, is the inclusion of provisions to maintain Omanisation controls and negative lists. This careful balancing act aims to attract foreign investment while simultaneously protecting the national labor market and ensuring sustainable economic development. Supporting SME growth in Oman is also a key priority, as the CEPA will provide these businesses with access to a significantly larger consumer base.
Trade Volume and Diversification of Exports
Current bilateral trade between Oman and India already stands at approximately USD 10.61 billion for FY 2024–2025, according to Mustafa bin Ahmed Salman, CEO of United Securities LLC. He predicts a substantial increase in this figure following the full implementation of the CEPA. A key objective of the agreement is to diversify Omani exports beyond the traditional reliance on oil and gas, fostering the growth of non-oil sectors and enhancing the nation’s logistics and re-export capabilities.
Salman also noted the potential for attracting valuable technology expertise and creating new employment opportunities. This diversification is crucial for building a more resilient and sustainable economy, less vulnerable to fluctuations in global energy markets. The Oman India economic partnership is therefore viewed as a long-term investment in Oman’s future prosperity.
A Qualitative Leap Towards Joint Economic Cooperation
Dr. Qais bin Dawood Al-Sabi’i, a legal advisor and economic expert, described the CEPA as a “qualitative leap” and a solid foundation for pioneering joint economic cooperation. He underscored India’s position as a major global industrial power and its immense consumer market, emphasizing the agreement’s role in diversifying exports, strengthening supply chains, and supporting small and medium-sized enterprises.
Furthermore, Dr. Al-Sabi’i highlighted the importance of the CEPA in advancing sustainable development, clean energy initiatives, and green industries. However, he also cautioned the need for balanced implementation to protect national industries and ensure fair competition. This careful approach will be essential to maximizing the benefits of the agreement while mitigating potential risks.
Enhancing Investment Attractiveness and Logistics Readiness
Engineer Saeed bin Nasser Al Rashdi, CEO of Insurance House Company (Bima Oman), affirmed that the CEPA significantly enhances Oman’s attractiveness as an investment and trade hub, particularly for manufacturing, metals, petrochemicals, and food products. He stressed the importance of ensuring production and logistics readiness to capitalize on the preferential access granted by the agreement.
Al Rashdi also emphasized the continued importance of Omanisation policies, stating that they are vital for safeguarding long-term economic and social benefits. Ultimately, the success of the CEPA will depend on a coordinated effort to prepare the Omani economy to fully leverage the opportunities it presents.
In conclusion, the Comprehensive Economic Partnership Agreement between Oman and India represents a pivotal moment in the bilateral relationship. With its potential to drive trade, investment, and diversification, the CEPA is poised to unlock significant economic benefits for Oman, supporting the ambitious goals of Oman Vision 2040. Continued collaboration, strategic implementation, and a commitment to sustainable development will be key to realizing the full potential of this landmark agreement. Businesses interested in exploring opportunities under the CEPA are encouraged to consult with relevant government agencies and industry associations to learn more.
