India and Oman CEPA and DTAA

January 29, 2025

India and Oman are advancing their economic collaboration by expediting discussions for a Comprehensive Economic Partnership Agreement (CEPA). This development comes as the two nations aim to strengthen trade relations.

Recent Developments

During a visit by India’s Commerce and Industry Minister Piyush Goyal to Oman, agreements were reached.
The two countries signed a protocol to amend the Double Taxation Avoidance Agreement (DTAA), which was originally implemented in 1997.
This amendment aligns with international standards and aims to simplify tax procedures for businesses operating across borders.

What is DTAA?

DTAA (Double Tax Avoidance Agreement) is a tax treaty between two countries.
It prevents individuals and businesses from being taxed twice on the same income.
Its purpose is to:
- Distribute taxing rights between the two countries.
- Provide clarity on tax liabilities and reduces legal uncertainties.

It encourages foreign investment and economic cooperation between countries and supports global financial transparency and prevents illegal tax avoidance.

India-Oman CEPA

The CEPA is expected to enhance bilateral trade and investment.
Negotiations for CEPA commenced in November 2023
Its purpose is to minimize or eliminate customs duties on specific goods while easing regulations to enhance trade in investments and services.
India has already implemented a CEPA agreement with the United Arab Emirates. This agreement came into effect in 2022.

Current Trade Statistics

In the fiscal year 2023-24, India’s exports to Oman were valued at approximately $4.47 billion. Conversely, imports from Oman were around $4.5 billion. Key imports include petroleum products and urea, which together account for over 70% of total imports from Oman.

Impact on Bilateral Relations

The CEPA and the amended DTAA are expected to serve as milestones in India-Oman relations. They will facilitate easier trade and investment flows, benefiting businesses in both countries. The agreements aim to create a more conducive environment for economic collaboration.

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