India’s signing of a Comprehensive Economic Partnership Agreement (CEPA) with Oman marks a quiet but strategically meaningful step in New Delhi’s evolving engagement with the Gulf region. While the agreement may not generate headlines on the scale of larger trade pacts, its importance lies in what it signals about India’s changing approach to global commerce—one that increasingly blends economic pragmatism with geopolitical calculation. As India navigates a world marked by slowing growth, fragmented supply chains and heightened strategic competition, trade agreements are no longer viewed merely as instruments of liberalisation but as tools to secure markets, manage dependencies and reinforce partnerships with trusted economies. The India–Oman CEPA is India’s 17th trade agreement and must be read in the context of a broader recalibration that has been underway since 2014. After years of scepticism towards free trade agreements—driven by concerns over widening trade deficits and uneven domestic impacts—India has gradually returned to bilateral and plurilateral trade diplomacy. Agreements concluded with Mauritius, the UAE, Australia, the European Free Trade Association and the United Kingdom reflect this renewed confidence. The emphasis, however, has shifted away from blanket tariff elimination towards carefully negotiated pacts that balance market access with protection for sensitive sectors. The Oman agreement fits squarely within this framework: measured, selective and aligned with India’s strategic priorities in West Asia.
At its core, a comprehensive partnership agreement seeks to go beyond conventional tariff reduction. It aims to lower non-tariff barriers, liberalise services, promote investment and facilitate smoother movement of goods and capital. For India, these objectives are particularly relevant at a time when export diversification has become an economic necessity. Traditional markets in Europe and North America are facing demand constraints, while geopolitical tensions have introduced new risks into global trade flows. Against this backdrop, the Gulf region—characterised by relatively stable demand, strong investment capacity and geographic proximity—offers India both opportunity and strategic reassurance. Under the India–Oman CEPA, Oman has committed to removing or significantly reducing duties on a wide range of Indian products. These include textiles and garments, gems and jewellery, leather goods, footwear, sports equipment, plastics, furniture, agricultural produce, engineering goods, pharmaceuticals, medical devices and automobiles. Many of these sectors are central to India’s manufacturing and export ecosystem and are also labour-intensive, with the capacity to generate employment across skill levels. Improved access to the Omani market could therefore translate not only into higher export volumes but also into job creation, particularly for small and medium enterprises that often struggle to penetrate overseas markets.
In return, India has offered tariff concessions—largely within defined quotas—on products such as dates, marbles and petrochemicals. Overall, India will liberalise tariffs on nearly 78 per cent of its total tariff lines, covering close to 95 per cent of imports from Oman by value. This represents a significant degree of openness, but one that is carefully calibrated. India has placed nearly 2,800 tariff lines on a negative or exclusion list, covering sensitive sectors such as dairy, tea, coffee, rubber, tobacco, chocolates, precious metals, jewellery and certain labour-intensive goods. This selective approach reflects lessons drawn from earlier trade experiences, where rapid liberalisation exposed domestic producers to intense competition without adequate safeguards.
The economic rationale of the agreement becomes clearer when examined against existing trade flows. In FY25, India’s exports to Oman stood at approximately USD 4.1 billion. These were led by petroleum products such as naphtha and petrol, alongside alumina, machinery, aircraft, rice, iron and steel articles, personal care products and ceramics. Imports from Oman were higher, at about USD 6.6 billion, and were dominated by crude oil, liquefied natural gas and fertilisers—commodities that are critical to India’s energy security and agricultural productivity. The trade relationship is therefore inherently complementary: Oman supplies essential energy inputs, while India exports a mix of industrial goods, consumer products and intermediate inputs. The CEPA builds on this complementarity while seeking to broaden its scope. For India, ensuring stable and diversified sources of energy remains a strategic priority, particularly as global energy markets remain volatile. At the same time, expanding non-oil exports is central to India’s long-term growth strategy. By institutionalising trade preferences and investment facilitation, the agreement creates a more predictable framework for businesses on both sides, reducing uncertainty and encouraging long-term commercial engagement.
Beyond economics, the strategic dimension of the India–Oman CEPA is equally significant. Oman occupies a crucial geographic position near the Strait of Hormuz, through which a substantial portion of global energy supplies passes. It has traditionally pursued an independent and balanced foreign policy, maintaining cordial relations across regional divides. For India, Oman has long been viewed as a stable and reliable partner in an otherwise turbulent region. Strengthening economic ties through a comprehensive trade agreement deepens this partnership and reinforces India’s presence in the western Indian Ocean, at a time when maritime security and supply chain resilience have assumed greater importance. The agreement also aligns with India’s broader trade and strategic outreach. Negotiations are ongoing with major partners such as the United States, the European Union, New Zealand, Chile, Peru and Israel. Taken together, these efforts suggest a deliberate attempt to integrate India more deeply into global and regional value chains while retaining policy space and strategic autonomy. Unlike the earlier phase of trade liberalisation, where agreements were often driven by multilateral enthusiasm, the current approach is more selective and interest-driven.
That said, the true test of the India–Oman CEPA will lie in its implementation. Experience shows that tariff concessions alone do not automatically translate into export growth. Factors such as logistics efficiency, port connectivity, customs procedures, standards compliance and access to affordable finance will determine whether Indian firms—particularly small and medium enterprises—are able to take advantage of new market opportunities. Domestic reforms that improve ease of doing business, reduce transaction costs and strengthen export competitiveness will be essential to convert negotiated benefits into tangible outcomes. If executed with discipline and supported by complementary domestic measures, the India–Oman CEPA could emerge as a template for India’s next generation of trade agreements: pragmatic rather than ideological, balanced rather than indiscriminate, and firmly anchored in national interest. In an era of economic uncertainty and strategic flux, such calibrated partnerships may well prove more valuable than grand, one-size-fits-all trade liberalisation.