India-Oman CEPA Opens Zero-Duty Access for Indian Automotive and Engineering Exports

The India-Oman Comprehensive Economic Partnership Agreement (CEPA), which entered into force on June 1, has created new opportunities for Indian automotive and engineering exporters. Under the agreement, the 5% Most Favoured Nation (MFN) tariff previously imposed on motor vehicles and engineering products has been eliminated, enabling Indian exporters to access Oman's import market with immediate zero-duty benefits. The development is expected to improve the competitiveness of Indian products and strengthen bilateral trade relations between the two countries.

The agreement significantly expands duty-free access for Indian exports. While only 15.33% of India's exports to Oman previously benefited from duty-free treatment under the MFN framework, the CEPA now extends duty-free access to 99.38% of Indian exports. This broad coverage includes automobiles, electrical equipment, machinery, iron and steel products, and non-ferrous metals. The tariff elimination is expected to encourage higher export volumes and improve market penetration for Indian manufacturers operating across these sectors.

India's Engineering Export Growth Outlook Under CEPA

Engineering exports from India to Oman, covering automobiles and several industrial product categories, reached USD 875.83 million in FY 2025-26 ending in March. With the implementation of CEPA, export volumes are projected to increase substantially over the coming years. Industry estimates indicate that engineering exports could grow to between USD 1.3 billion and USD 1.6 billion by 2030, supported by improved market access, reduced trade barriers, and stronger economic cooperation between the two nations.

Key Trade Benefits for Indian Exporters

• Removal of the 5% MFN tariff on motor vehicles and engineering goods.
• Immediate zero-duty access to Oman's import market.
• Duty-free coverage expanded from 15.33% to 99.38% of Indian exports.
• Improved competitiveness for automotive and engineering manufacturers.
• Enhanced opportunities for long-term export growth.

Projected Engineering Export Growth Under India-Oman CEPA

Strategic Gateway to GCC and East African Markets

Beyond tariff advantages, the agreement also enhances the strategic trade position of Indian exporters. Oman's logistics hubs at Sohar, Duqm, and Salalah are expected to play an important role in facilitating regional trade flows. These locations can serve as distribution and transshipment gateways for Indian automotive and engineering products destined for wider GCC and East African markets. Improved connectivity through these hubs may help exporters expand their regional footprint and strengthen supply chain efficiency across multiple international markets.

Frequently Asked Questions

What is the main benefit of the India-Oman CEPA for automotive exporters?
The India-Oman CEPA provides immediate zero-duty access for Indian automotive exports entering Oman by removing the previous 5% MFN tariff on motor vehicles. This improves price competitiveness for Indian manufacturers and reduces import costs for buyers in Oman. The agreement also expands duty-free coverage across a wide range of engineering products, creating new opportunities for export growth and helping Indian companies strengthen their presence in the Omani market.

How can Oman's logistics hubs support Indian exports?
Oman's major logistics centers at Sohar, Duqm, and Salalah are strategically positioned to facilitate regional trade. These hubs can act as gateways for Indian automotive and engineering products moving beyond Oman into GCC countries and East African markets. Their infrastructure and connectivity can help improve supply chain efficiency, reduce transit complexities, and support exporters seeking broader international market access through a single regional entry point.