India and Oman: The next trade frontier | Viewpoint by Anil Wadhwa
The Comprehensive Economic Partnership Agreement will give India alternative trade and investment channels in the Gulf at a time of geopolitical upheaval
When India and Oman signed their Comprehensive Economic Partnership Agreement in late 2025, they had not just inked a trade deal, they had created a lifeline. The agreement came into force on June 1, and has immediately gained significance due to the crisis in West Asia and the Gulf, and the closure of the Strait of Hormuz, through which massive chunks of energy and trade flow. For India, this agreement is about securing its future when the ground beneath global supply chains is shifting.
Oman has opened its doors wide for Indian goods. Nearly every product line—98 per cent—gets free entry into Oman. That covers almost all of what India sells there, from textiles and leather to gems and jewellery, machinery, medicines and agriculture goods. On India’s part, nearly 78 per cent of tariff lines exported by Oman see reduced duties, though India has kept protections for sensitive items like dairy, precious metals and footwear.
The deal also unlocks services. Indian technology companies, consultants, educators and healthcare providers can operate in Oman with fewer barriers, enhancing mobility of professionals. In fact, Indian businesses can own 100 per cent of their operations in Oman’s key sectors, including in special economic zones like Sohar and Salalah.
Currently, India and Oman trade about $10.5 billion (Rs 10,045 crore) worth of goods annually, with India sending $4.1 billion (Rs 3,922 crore) in exports. This agreement could potentially push that number past $13 billion (Rs 12,437 crore) within a few years. There are already 6,000 Indian companies operating in Oman, with investments totalling more than $7.5 billion (Rs 7,175 crore). Indian firms can now invest in Oman’s solar infrastructure and smart city initiatives with reduced friction. In return, Oman gains access to India’s booming technology ecosystem, creating a two-way flow of innovation and expertise.
The agreement will deepen investment ties. India plans to invest in Oman’s emerging industries, leveraging its expertise in manufacturing and clean technology. Omani sovereign capital can invest more freely in Indian manufacturing and improve its food security.
Omani ports such as Duqm and Salalah, already regional transhipment and bunkering hubs, can serve as secure nodes for rerouting goods, sorting critical supplies and staging commercial operations away from the immediate volatility of the northern Gulf. India’s vulnerability to immediate disruptions or extended naval contestation in the Northern Arabian Sea will stand reduced. Moreover, Omani facilities can add value to Indian raw or semi-processed exports before they enter premium markets.
This trade agreement is also a multiplier for market access. Oman’s modern ports and preferential trade agreements with other regions create transhipment efficiencies that lower the cost of reaching far-flung markets. This means Indian exporters from textiles and pharmaceuticals to automobiles and agri-processed foods gain faster and cheaper corridors to buyers without entirely new bilateral mechanisms. Indian goods can become more attractive to buyers in the UK, US and EFTA countries, who have free trade agreements with Oman and desire supply chain resilience.
The India-Oman trade agreement may not fully insulate India from the macroeconomic shock of a major regional war or act as a substitute for comprehensive naval and diplomatic strategies. But it gives India practical tools: alternative logistics, a friendly transhipment base, investment linkages and a trade partner that can keep corridors open. In the 21st century contest between commerce and conflict, geography still matters, and agreements such as these amplify the advantages therein. This agreement sets a historic precedent and turns it into a modern buffer and bridge, shielding Indian trade from immediate regional spillover, all while broadening access to the markets that matter most to India’s economic ambitions.
—Wadhwa is former secretary,Ministry of External Affairs, and ex-ambassador to Oman
When India and Oman signed their Comprehensive Economic Partnership Agreement in late 2025, they had not just inked a trade deal, they had created a lifeline. The agreement came into force on June 1, and has immediately gained significance due to the crisis in West Asia and the Gulf, and the closure of the Strait of Hormuz, through which massive chunks of energy and trade flow. For India, this agreement is about securing its future when the ground beneath global supply chains is shifting.
Oman has opened its doors wide for Indian goods. Nearly every product line—98 per cent—gets free entry into Oman. That covers almost all of what India sells there, from textiles and leather to gems and jewellery, machinery, medicines and agriculture goods. On India’s part, nearly 78 per cent of tariff lines exported by Oman see reduced duties, though India has kept protections for sensitive items like dairy, precious metals and footwear.
The deal also unlocks services. Indian technology companies, consultants, educators and healthcare providers can operate in Oman with fewer barriers, enhancing mobility of professionals. In fact, Indian businesses can own 100 per cent of their operations in Oman’s key sectors, including in special economic zones like Sohar and Salalah.
Currently, India and Oman trade about $10.5 billion (Rs 10,045 crore) worth of goods annually, with India sending $4.1 billion (Rs 3,922 crore) in exports. This agreement could potentially push that number past $13 billion (Rs 12,437 crore) within a few years. There are already 6,000 Indian companies operating in Oman, with investments totalling more than $7.5 billion (Rs 7,175 crore). Indian firms can now invest in Oman’s solar infrastructure and smart city initiatives with reduced friction. In return, Oman gains access to India’s booming technology ecosystem, creating a two-way flow of innovation and expertise.
The agreement will deepen investment ties. India plans to invest in Oman’s emerging industries, leveraging its expertise in manufacturing and clean technology. Omani sovereign capital can invest more freely in Indian manufacturing and improve its food security.
Omani ports such as Duqm and Salalah, already regional transhipment and bunkering hubs, can serve as secure nodes for rerouting goods, sorting critical supplies and staging commercial operations away from the immediate volatility of the northern Gulf. India’s vulnerability to immediate disruptions or extended naval contestation in the Northern Arabian Sea will stand reduced. Moreover, Omani facilities can add value to Indian raw or semi-processed exports before they enter premium markets.
This trade agreement is also a multiplier for market access. Oman’s modern ports and preferential trade agreements with other regions create transhipment efficiencies that lower the cost of reaching far-flung markets. This means Indian exporters from textiles and pharmaceuticals to automobiles and agri-processed foods gain faster and cheaper corridors to buyers without entirely new bilateral mechanisms. Indian goods can become more attractive to buyers in the UK, US and EFTA countries, who have free trade agreements with Oman and desire supply chain resilience.
The India-Oman trade agreement may not fully insulate India from the macroeconomic shock of a major regional war or act as a substitute for comprehensive naval and diplomatic strategies. But it gives India practical tools: alternative logistics, a friendly transhipment base, investment linkages and a trade partner that can keep corridors open. In the 21st century contest between commerce and conflict, geography still matters, and agreements such as these amplify the advantages therein. This agreement sets a historic precedent and turns it into a modern buffer and bridge, shielding Indian trade from immediate regional spillover, all while broadening access to the markets that matter most to India’s economic ambitions.
—Wadhwa is former secretary,Ministry of External Affairs, and ex-ambassador to Oman
