The India-Oman Comprehensive Economic Partnership Agreement (CEPA) came into effect on June 1, 2026. The agreement was signed on December 18, 2025, in Muscat during the visit by Indian Prime Minister Narendra Modi. It lays the foundation for deeper economic and strategic cooperation between the two countries.
The timing is important, given the ongoing turbulence and disruption in maritime traffic in the region because of the Iran war. The Strait of Hormuz remains one of the world’s maritime chokepoints, carrying around one-quarter of global seaborne oil trade and nearly one-fifth of global liquified natural gas trade. Any disruption in this corridor has implications for global energy markets and India’s energy security, as well as its broader engagement with the region.
The timing is important, given the ongoing turbulence and disruption in maritime traffic in the region because of the Iran war.
This agreement goes beyond a traditional trade pact. It covers trade in goods and services, investment, professional mobility, digital trade, and supply-chain cooperation. A feature of the agreement is the reduction and elimination of tariffs. Under the CEPA, India has secured duty-free access on 98.08 percent of Oman’s tariff lines, covering 99.38 percent of India’s exports to Oman. This will boost the competitiveness of Indian products and expand export opportunities in the Omani market.
Union Commerce and Industry Minister Piyush Goyal announced the commencement of the agreement, predicting it will be a milestone in New Delhi’s mission to create pathways to prosperity for students, artisans, women, farmers, fishermen, and Micro, Small, and Medium-sized Enterprises by opening new markets, boosting exports, attracting investments, and accelerating job creation. This agreement is also important because it will provide more opportunities and serve as a catalyst for India to expand trade with the Persian Gulf, East Africa, and other Middle Eastern markets.
According to industry experts, the agreement creates a framework for a relationship that is critical to India’s energy needs, particularly as India remains dependent on imports of crude oil, natural gas, and petrochemicals.
The agreement comes as both countries seek to lock in supply-chain resilience and investment in the Persian Gulf. The agreement advances India’s efforts to diversify supply chains and build more resilient trade networks. India is positioning itself as a manufacturing and services hub, while Oman is pitching itself as a logistics and energy gateway under Vision 2040. Oman is expected to emerge as a strategic manufacturing, logistics, and re-export hub for Indian businesses seeking wider access to the Middle Eastern markets.
India is positioning itself as a manufacturing and services hub, while Oman is pitching itself as a logistics and energy gateway.
Oman’s strategic geography also adds value. A large part of its coastline lies outside the Strait of Hormuz, and ports such as Duqm, Salalah, and Sohar play an increasingly important role as logistics, transshipment, and industrial hubs, reducing vulnerability for India. Oman’s location along key sea lanes, along with India’s access to facilities at the Port of Duqm for logistics and naval support, strengthens New Delhi’s presence in the western Indian Ocean. The CEPA adds an economic dimension to this strategic relationship.
This agreement is also important because Oman is a stabilizing partner in this region and has good ties with all the rival countries in the region, like the United States, Israel, other Gulf Arab countries, and Iran.
This agreement can be a catalyst for India’s broader engagement with the Middle East. Although Oman is not part of the India Middle East Economic Corridor, India’s expanded economic cooperation with Oman can complement broader Corridor-related connectivity efforts. Oman can also act as a strategic node and can support these emerging partnerships. Oman’s stability makes it a useful anchor for Indian economic and diplomatic expansion in the region.
