The Comprehensive Economic Partnership Agreement (CEPA) between India and Oman officially came into effect today, opening a new chapter in bilateral economic relations and providing expanded market access for Indian exporters.
Announcing the implementation of the agreement, Union Commerce and Industry Minister Piyush Goyal said the pact would help create new opportunities for students, artisans, women, farmers, fishermen, and micro, small and medium enterprises (MSMEs) by expanding exports, attracting investment, and supporting job creation.
The agreement was signed in December last year during Prime Minister Narendra Modi’s visit to Muscat.
Strategic Importance Amid Regional Tensions
The trade pact comes into force at a time when geopolitical tensions in West Asia continue to disrupt regional trade routes.
The ongoing conflict involving Iran has affected shipping movements through the Strait of Hormuz, a critical route that handles around 20% of global daily oil consumption and approximately 25% of global seaborne oil trade.
Unlike several Gulf states whose shipping routes depend heavily on the Strait of Hormuz, Oman occupies a strategically advantageous position. Much of its coastline lies outside the strait, directly facing the Arabian Sea and the Gulf of Oman, allowing key ports to remain operational even during regional disruptions.
According to trade experts, major Omani ports such as Salalah and Duqm can continue functioning as important trade and energy gateways during periods of instability in the Gulf region.
Recent trade data highlights this advantage. While India’s imports from major Gulf economies fell sharply between April 2025 and April 2026, Oman emerged as an exception.
India’s imports from Oman increased by more than 246%, rising from approximately $430 million to nearly $1.5 billion, largely driven by purchases of crude oil and urea. During the same period, India’s exports to Oman declined by only 10.3%, outperforming trends seen elsewhere in the region.
Benefits for Indian Exporters
Under the agreement, Oman will provide zero-duty access on 98.08% of its tariff lines, covering 99.38% of India’s exports to the country.
This marks a significant expansion from the pre-CEPA framework, under which only about 15.3% of Indian exports enjoyed duty-free treatment.
The agreement offers full tariff elimination across several labour-intensive sectors, including:
- Gems and jewellery
- Textiles and apparel
- Leather and footwear
- Sports goods
- Plastics
- Furniture
- Agricultural products
- Engineering goods
- Pharmaceuticals
- Medical devices
- Automobiles
India’s exports to Oman were valued at approximately $3.64 billion in FY2026. Major export items included refined petroleum products, naphtha, calcined alumina, iron and steel products, machinery, and rice.
Although many Indian products already entered Oman at relatively low tariff rates, some sectors faced duties as high as 100%. The removal of these tariffs is expected to improve the competitiveness of Indian goods in the Omani market.
However, analysts note that export growth may be moderated by Oman’s relatively small domestic market, with a population of around 5.5 million and a GDP of approximately $110 billion.
Benefits for Oman
In return, India has agreed to eliminate or reduce tariffs on around 78% of its tariff lines.
Oman’s primary gains are concentrated in sectors where it already has a strong presence in the Indian market, particularly energy, fertilisers, and industrial raw materials.
India imported goods worth approximately $7.2 billion from Oman during FY2026. Key imports included:
- Crude oil
- Liquefied natural gas (LNG)
- Fertilisers
- Methanol
- Ammonia
These imports play an important role in supporting India’s energy security, agricultural sector, and industrial production.
Strengthening Economic Ties
The implementation of the CEPA is expected to deepen economic cooperation between the two countries while improving supply-chain resilience during periods of geopolitical uncertainty.
For India, the agreement not only expands export opportunities but also strengthens access to a strategically located partner capable of supporting trade and energy flows during disruptions in the Gulf region.
As global trade routes face increasing uncertainty, the India-Oman CEPA is expected to enhance bilateral trade, improve market access, and support long-term economic cooperation between the two nations.
