Trade treaties: key to economic transformation

In the complex world of modern trade, the Sultanate of Oman is not merely seeking partners — it is engineering a new economic architecture. Our goal, as enshrined in Oman Vision 2040, demands more than incremental change; it calls for a foundational shift that only deep strategic agreements can provide. This is why our focus has decisively moved towards a comprehensive strategy, leveraging Free Trade Agreements (FTAs) for foundational market access and ultimately, the comprehensive depth of both Comprehensive Economic Partnership Agreements (CEPAs) and Trade and Economic Partnership Agreements (TEPAs). These sophisticated treaties are not just about lowering tariffs they are mechanisms for integration, linking our logistics hubs, manufacturing zones and skilled workforce directly to the world's fastest-growing markets.
Our location remains Oman’s strategic advantage: astride the Strait of Hormuz, with world-class deep-water gateways at Al Duqm, Suhar and Salalah that face both Asia and Africa. Even the new Hafeet rail link with the UAE will soon tie Suhar into the Gulf’s industrial heartland, strengthening the trade arteries that make manufacturing feasible at scale. This infrastructure, however, needs policy fuel. That fuel comes from strategic partnerships that transform our ports from temporary transit points into engines of sustainable economic activity.
We have successfully navigated this path before. The Oman–US FTA, which came into force in 2009, moved virtually all US-origin goods to duty-free status clearly demonstrating how tariff reform combined with transparent rules can attract investment and strengthen local value chains. But the future is shaped by the next generation of agreements. Unlike traditional FTAs that stick largely to tariffs on goods, CEPAs and TEPAs extend into services, investment, digital trade, technical standards and professional mobility — the real levers of a modern, diversified economy. For a Gulf economy operating under the GCC’s common external tariff — typically 5% on most goods — a comprehensive agreement can phase many lines to zero, while streamlining customs, testing and licensing procedures. That is the fundamental difference between being a temporary corridor and becoming a permanent production hub.
The clearest and most transformative test case now is India. Negotiations for an India–Oman CEPA concluded recently, with the signing anticipated very soon. This is more than a ceremonial flourish; it is a statement of intent and direction. India, with its 1.4 billion consumers and surging manufacturing power, is one of our closest historical partners. Our commercial base is already strong: bilateral trade reached about $12.4 billion in FY 2022–23, supported by over 6,000 India–Oman joint ventures operating across the Sultanate of Oman. A CEPA will give this robust, active relationship the necessary structure, accelerated pace and long-term road map it deserves.

So, how does a CEPA or TEPA actually change the economic game on the ground? First, by cutting or eliminating tariffs on a large share of goods, it decisively narrows the cost gap that often kills factory-floor decisions. Second, by strategically opening services and investment, it lets capital, engineers and innovative ideas move with fewer frictions — allowing, for example, a pharmaceutical or equipment maker to co-locate research, testing and assembly in our free zones. Third, by clarifying rules of origin and facilitating mutual recognition of standards, it gives Small and Medium Enterprises (SMEs) the certainty they need to supply larger investors. For Oman, there is a powerful double arbitrage: 'Make in Oman' for India and the wider region — and 'Make in Oman' for the United States, leveraging our standing duty-free access under the US FTA. That is precisely how a treaty becomes a fully-funded factory plan.
We also benefit from a proven regional example. The India–UAE CEPA of 2022 offers a powerful example, coinciding with a sharp lift in trade flows and pushing India–UAE bilateral commerce towards its $100 billion target. The essential lesson is that paperwork alone does not drive commerce; rather, it is paperwork backed by ports, finance and efficient regulators that builds a high-trust, fast-track trade environment. Oman is perfectly poised to replicate this success: our ports and industrial zones will become the cost-efficient, rules-reliable bases for companies to serve Asia, Africa and the Americas.
The prize is a larger, more resilient non-oil economy under Oman Vision 2040, focused on logistics, manufacturing and green energy — from metals and green ammonia to pharmaceuticals. To realise this, Omani SMEs must become integral suppliers. Yet, benefits are not automatic; without diligent execution, Oman risks remaining a waypoint rather than a hub. The true difference maker lies in policy execution and institutional efficiency — from faster customs and one-stop investor facilitation to local-content frameworks that reward Omani participation. This requires aligning our workforce training with investor demand, preparing specialised welders and coders for the exact jobs new hubs will post. The agreements open the door; our institutions must hold it wide.
Ultimately, this entire strategic endeavour is about confidence — the confidence of international investors who choose Oman for their next manufacturing plant, the confidence of young Omanis who choose skills track that leads to a career in a globally competitive factory and the confidence of our exporters who choose our ports because they trust our rules and efficiency. When the India–Oman CEPA is signed, it will not merely lower tariff lines; it will signal Oman’s transformation from a trading route to a value-building economy. Trade agreements are our master key. Let us use them — boldly, deliberately and with the pride of a nation that knows where it stands and where it is heading.