India–Oman Comprehensive Economic Partnership Agreement (CEPA) came into force on 01 June 2026, marking an important milestone in India’s regionalism strategy in the broader Gulf region. This agreement is part of wider attempt to build sustainable and robust economic linkages with the Gulf region. After the India–UAE CEPA, the agreement with Oman extends India’s “Look West” approach. This also strengthens New Delhi’s presence in a region which is crucial for its energy security, maritime connectivity, trade diversification and investment flows. India and Oman are strategic partners since November 2008.
Oman occupies a distinctive position in the Gulf region. Its geostrategic positioning at the intersection of the Arabian Sea, the Gulf of Oman and the wider Indian Ocean region makes Oman significant by enhancing its strategic value for maritime trade. Oman, as a nation, is also considered to be a middle power in the broader Middle Eastern region due to its diplomatic balance and regional mediation efforts. This makes it a relatively stable partner for India at a time when global trade there is uncertainty related to tariffs, supply chain disruptions and geopolitical tensions. For India, deeper economic engagement with Oman can support New Delhi’s commercial and strategic objectives without overextending the scope of the agreement.
The economic case for CEPA is based on complementarity. India is a large, fast growing market with expanding manufacturing, services and consumption demands. Oman, by contrast, is a lucrative but hydrocarbon-dependent economy seeking diversification under its Vision 2040 plans. Oman’s dependence on rentier income has made it vulnerable to global price shocks, particularly after the 2014 oil price decline and during the pandemic period. The vulnerability in the energy market has also affected the Omani economy. In such a scenario, a trade agreement with India can therefore help Oman to widen its export base, attract investment and reduce excessive dependence on hydrocarbons.
For India, the agreement has direct relevance in terms of energy security, supply chain resilience and trade. India requires stable supplies of energy, fertilisers, etc., where Oman is a significant partner. This CEPA between India and Oman can strengthen such arrangements by providing a more predictable framework for trade and investment. At the same time, India can expand exports of domestic exporters in sectors such as textiles, leather, plastics, marine products, automobiles, sports goods, and agriculture items to the Omani market. The Bilateral trade between India and Oman stands at around $11.18 billion in the FY 2025-26, which is an increase from up from $ 10.61 billion in FY 2024-25. This CEPA indicates that trade should diversify beyond energy by making bilateral commerce less vulnerable to volatile oil prices. Oman’s exports to India remain majorly concentrated in hydrocarbons and related sectors, but CEPA can help it enter India’s large market in non-oil areas. For Oman, India offers scale, demand stability and scope for developing long term partnerships. Indian investment in Omani industrial zones, ports, logistics, green hydrogen, petrochemicals and manufacturing sectors can support Oman’s diversification agenda while providing Indian firms a stronger Gulf platform. Oman also hosts a sizeable Indian diaspora, and labour mobility remains an important pillar of this bilateral relationship. In this aspect, CEPA can create a framework for addressing these matters more systematically. With the diversifying economy, Oman requires skilled and semi-skilled workers in construction, healthcare, hospitality, manufacturing and services and other sectors.
This agreement also has a wider regional significance. Oman can serve as a bridge between India and the Gulf region, as well as between India and emerging trade corridors linking the Middle East, North Africa and Europe. Its ports and logistics infrastructure can support India’s extensive maritime strategy, including emerging connectivity initiatives. So, Oman’s role as a stable maritime partner gives the CEPA a pragmatic strategic dimension.
However, the advantage of this agreement lies in the future to see. The reduction in tariffs alone will not guarantee trade expansion. Both countries need to address non-tariff barriers, customs procedures, standards, logistics costs and regulatory uncertainty. Indian exporters will require sector-specific support to use preferential access effectively. Similarly, investment provisions must be transparent to encourage long-term capital flows without creating unrealistic expectations.
The India–Oman CEPA is a pragmatic economic instrument which aligns India’s export ambitions and Gulf strategy with Oman’s diversification requirements. Its significance lies not in dramatic transformation, but in building a structured, predictable and mutually beneficial partnership. If implemented thoroughly, it can become a useful template for India’s future economic engagement with the wider GCC states.
Dr Anu Sharma is an Assistant Professor at Amity Institute of Defence and Strategic Studies (AIDSS), Amity University in Noida.
The views expressed are that of the author and do not represent the institution.
