The India-Oman Comprehensive Economic Partnership Agreement (CEPA) will not only enable more bilateral trade and cooperation but will also open new routes and ports for India in West Asia at a time when the critical Strait of Hormuz remains closed.

The CEPA, which was signed on December 18, 2025, comes into effect from June 1 and provides a comprehensive framework covering trade in goods and services, investment, professional mobility, and regulatory cooperation. Bilateral trade between India and Oman grew by 5.41% to $11.18 billion in FY26 from $10.6 billion in FY25.

Under the deal, India secures 100% duty-free market access in Oman across 98.08% of tariff lines, covering 99.38% of export value, with benefits effective immediately. Earlier, under the MFN regime, only 15.33% of India’s exports entered Oman duty-free. With CEPA, Indian exporters gain substantial price competitiveness in Oman’s nearly $28 billion import market.

“The Indian Oman CEPA marks a new milestone in India’s global trade landscape, ushering in a new era of economic partnership between the two nations,” Commerce and Industry Minister Piyush Goyal said on Monday. It is expected to bring gains for India’s micro, small and medium enterprises as well as open opportunities in textiles, gems and jewellery, transport equipment, precision instruments and processed foods.

But beyond the gains in trade, the CEPA is expected to help India amid the current geopolitical turmoil that has kept exports to West Asia subdued, and critical routes and ports in and around the region closed. Major ports in Oman, such as the Port of Salalah and Port of Duqm to remain accessible even though the Strait of Hormuz is closed and would enable Oman to be a critical gateway of trade for India.

“Oman is India's second-largest trading partner in the Gulf region and serves as a strategic gateway to the wider GCC market through its advanced port infrastructure,” noted an official release, adding that Oman’s strategic logistics hubs at Sohar, Duqm and Salalah provide Indian exporters’ enhanced access not only to Oman but also to wider GCC and East African markets.

A report by Global Trade Research Initiative (GTRI) also highlighted this aspect, noting that the ongoing Gulf conflict has clearly demonstrated this advantage. India’s imports from major Gulf economies fell sharply from about $15 billion in April 2025 to $9.8 billion in April 2026, while India’s exports to the region dropped from $4.4 billion to $2.7 billion, it noted.

However, Oman was the notable exception. India’s imports from Oman surged by 246.4% to $1.5 billion from $430 million, driven by higher purchases of crude oil and urea. Meanwhile, India’s exports to Oman declined by only 10.3%. “The experience shows that Oman can act as a dependable alternative trade and energy gateway for India when the Strait of Hormuz becomes risky or congested,” said the report.

As part of the CEPA, India has offered tariff liberalisation on 77.79% of tariff lines covering 94.81% of imports from Oman by value, while maintaining strong safeguards for sensitive sectors. Products protected under the exclusion list include dairy products, cereals, fruits, vegetables, edible oils, oilseeds, rubber, leather, spices and key agricultural products.

Published on: Jun 1, 2026 5:05 PM IST