Economy Policy
Oman raises cap on Indian workforce to 50% under landmark trade pact
While Oman will continue to mandate the hiring of local citizens, government officials clarified that stricter restrictions apply only to select senior or sensitive roles, with most sectors seeing relaxed conditions for foreign professionals.
The Sultanate of Oman has agreed to allow companies operating in the country to employ up to 50% Indian nationals, doubling the existing cap of 20%, as part of a new Comprehensive Economic Partnership Agreement (CEPA signed between India and Oman.
The move marks one of the most significant labour-market concessions secured by India in the Gulf region and is expected to benefit Indian workers, professionals and businesses with operations in Oman.
The agreement was signed last week as India looks to deepen economic ties in the Middle East and diversify export markets amid rising trade tensions and steep tariffs imposed by the United States.
Under the pact, Oman will provide zero-duty access on more than 98% of its tariff lines, covering almost all Indian exports, including gems and jewellery, textiles, pharmaceuticals and automobiles, according to India’s commerce ministry.
A key feature of the agreement is the enhanced employment quota for Indian nationals. Officials said the revised cap ensures that Indian companies setting up operations in Oman are not forced to hire workers from third countries, providing greater certainty and flexibility in workforce planning. The CEPA includes a “standstill” clause, which means the 50% ceiling cannot be diluted in the future, offering long-term protection for Indian enterprises and employees.
The pact also includes a parity provision, under which any labour-related concessions offered by Oman to other Saarc nations will automatically apply to India.
While Oman will continue to mandate the hiring of local citizens, government officials clarified that stricter restrictions apply only to select senior or sensitive roles, with most sectors seeing relaxed conditions for foreign professionals.
Services trade and labour mobility form a central pillar of the agreement. Oman currently hosts around 7,00,000 Indian nationals, who remit more than $2 billion annually to India.
The CEPA expands quotas for intra-corporate transferees, with visas now valid for up to four years. Contractual service suppliers will also be eligible for four-year visas, while independent professionals can stay for up to 180 days.
Business visitors will be granted visas of up to 90 days.
Beyond labour mobility, the agreement is expected to boost bilateral trade, which currently exceeds $10 billion annually.
India will reduce tariffs on about 78% of its tariff lines, covering nearly 95% of imports from Oman by value. The deal is also strategically significant for New Delhi, given Oman’s location near the Strait of Hormuz, a critical transit route for global oil shipments.
Prime Minister Narendra Modi said the pact would “set a new pace of trade, add new trust to investments and open doors to new opportunities across sectors.” The agreement is India’s second major bilateral trade pact this year, following a deal with the United Kingdom, as exporters seek new markets to offset the impact of higher U.S. tariffs.
This is Oman’s first bilateral trade agreement since its 2006 pact with the United States. Trade experts say the deal goes beyond tariffs. “It is as much about geopolitics and regional presence as it is about market access,” said Ajay Srivastava, founder of the Global Trade Research Initiative.
Industry bodies have welcomed the agreement, particularly for sectors such as gems and jewellery, where exports to Oman are expected to rise sharply over the next three years. At the same time, sensitive products including dairy, tea, coffee, rubber and tobacco have been excluded from the pact.
The agreement also opens new opportunities in Oman’s $12.5 billion services import market, where India currently holds a modest share.
Overall, the CEPA is expected to strengthen India’s economic footprint in the Gulf, enhance employment prospects for Indian professionals, and reinforce Oman’s role as a key partner in India’s West Asia trade and investment strategy.
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