As Hormuz faces disruption, India finds a reliable partner in Oman

The India-Oman Comprehensive Economic Partnership Agreement (CEPA), which was signed on December 18, 2025, during Prime Minister Narendra Modi’s visit to Muscat, entered into force on June 1, 2026. It is a landmark agreement for broader economic collaboration, supply chain integration, and securing alternative navigation access during critical geopolitical events such as the Hormuz crisis. Moreover, the CEPA illustrates the civilisational bond and deep trust between India and Oman.

Economic Significance

The CEPA between India and Oman covers trade in goods and services, investment, professional mobility, dispute resolution, and allied regulatory mechanisms. Before CEPA, India had Oman’s Most Favoured Nation (MFN) status, with 15.33 per cent of Indian exports to Oman being duty-free. Now that CEPA is in effect, India gains 100 per cent duty-free market access. Oman has offered 98.08 per cent of its tariff lines, whereas India has reciprocated with 78 per cent of its tariff lines.

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India has applied exclusion safeguards on sensitive domestic industries, including dairy products, edible oils, oilseeds, spices, tea, coffee, footwear, rubber products, and specific chemical products. These represent mostly sensitive agricultural and industrial sectors. Given these limited restrictive measures, the CEPA revolutionises the trade and tariff architecture between the two countries.

The CEPA gives the export of Indian engineering goods a strong impetus to increase its export profile from $875.83 million in FY 2024-25 to a projected $1.3-1.6 billion by 2030. Zero duty will benefit Indian MSMEs and increase their exports of industrial machinery, motor vehicles, auto components, iron, steel, textiles, pharmaceuticals, gems and jewellery, engineering products, and electrical equipment.

Pharmaceuticals and healthcare receive fast-track approvals. Approved medications, including important vaccines and active pharmaceutical ingredients, authorised by global regulators such as the US FDA or the UK MHRA, will receive marketing authorisation in Oman within 90 days. Chemicals, seafood, and marine products will be duty-free. It will give India the necessary freedom to expand its export profile. Vannamei shrimp and frozen cuttlefish are in high demand in the market.

Indian coastal fisheries will benefit from the duty-free export of seafood. It will also encourage Indian farmers to expand their fisheries production. The first preferential consignments of agricultural goods from Indian ports provide an agricultural boost. Historically, India has not performed well in chemical exports. Zero duty on chemical exports will give impetus to chemical exports.

For India’s economic progress and global importance, exports are important. Manufacturing is necessary for exports. The CEPA is a significant step towards expediting and accelerating exports and manufacturing. It offers an opportunity to expand the export profile. It also provides India with fertiliser security. Oman diverts fertiliser output from the Oman India Fertiliser Company (OMIFCO) directly to Indian markets.

Strategic Significance

The CEPA marks deeper institutional ties and collaboration between India and Oman. The ongoing global maritime volatility demands stronger collaboration between India and its trusted partners. The current Strait of Hormuz crisis has disrupted supply chains. The blockade of this critical transit route has disrupted trade connectivity, exports and imports, and energy supplies. Singular dependence on the Strait of Hormuz has proved detrimental to supply chains, trade, and energy supplies. In such a critical time, Oman provides an alternative route.

Indian goods can reach Oman via Sohar, Duqm, and Salalah ports. Indian goods can reach other destinations through direct maritime connectivity with Oman. It will provide significant relief to the affected economies in the region. The Gulf countries depend heavily on India for vital supplies, especially food, pharmaceuticals, and other essential products. India’s interests are deeply embedded in the Gulf through the Indian diaspora, the service sector, business, and remittances. Indian connectivity with the Gulf is essential. Oman, therefore, offers trade opportunities with India through CEPA to maintain its interdependence with the Gulf.

The Port of Sohar, the Port of Duqm, and the Port of Salalah in Oman are gateways to the Arabian Sea and the Indian Ocean. This geographical advantage gives Indian companies and goods access to broader markets in the Gulf Cooperation Council (GCC) and East Africa. The CEPA opens the door to opportunities for Indian service professionals and corporate investment. India’s crucial partnerships with the UAE and Oman broaden its engagement with the GCC. India and the UAE signed a CEPA in 2022, and it has since led to significant growth in bilateral trade and investment, as well as the diversification of non-oil trade.

The CEPA with Oman offers an alternative, especially a Plan B, to insulate India’s energy and economic corridors from the Strait of Hormuz’s precarity. Oman’s coastline and deep-water ports offer alternative maritime routes that bypass the Hormuz chokepoint. Omani ports provide uninterrupted maritime access to the Arabian Sea. The CEPA enables India to continue trade with the GCC through Oman. It provides a lifeline to Indian trade with Gulf nations, which has contracted due to Hormuz volatility.

India’s direct sea access to Oman has seen a surge in imports from Oman since the Hormuz blockade. India has rapidly rerouted its crude oil and urea imports through Oman. In this regard, long-term infrastructure to enhance structural connectivity, especially the proposed 2,000 km undersea gas pipeline, will directly transfer energy to India. Today, India is also importing crude oil from the Gulf through Oman and transporting it through Omani ports. It is also importing Omani crude and LNG to meet the energy crisis in the Indian market.

Cultural Significance

India’s civilisational ties with Oman date back to antiquity. Its diasporic connection with Oman is not a twentieth-century phenomenon. It has a rich historical legacy rooted in maritime trade and shared heritage between India and Oman. Even today, the Indian diaspora plays a significant role in Oman’s economy, making Oman stronger, better, and more resilient, while strengthening India-Oman bilateral relations.

Approximately 6.8 to 7 lakh Indians live in Oman, constituting nearly 20 per cent of its total population. Education, the economy, and entrepreneurship are the three important areas in which they contribute immensely. They are the living bridge that connects the two countries in a more secure, cohesive, and stronger partnership. The CEPA is a clear illustration of this long-sustained relationship.

(Jajati K. Pattnaik is a Professor and Chairperson at the Centre for West Asian Studies, School of International Studies, Jawaharlal Nehru University, New Delhi. Chandan Panda is a Professor at the Central University of Karnataka, Karnataka. Views expressed in the above piece are personal and solely those of the authors. They do not necessarily reflect Firstpost’s views)