India-Oman CEPA special due to crucial timing, strategic location: Report
Muscat/ New Delhi, June 11 The India‑Oman Comprehensive Economic Partnership Agreement is special as it comes into force at a time when India faces a sharp disruption in Gulf trade after the Strait of Hormuz crisis and also because of Oman's unique geography.
Oman's unique geography including its coastline and major ports such as Salalah and Duqm which lie outside the Strait of Hormuz, keeping them accessible even when Strait traffic is disrupted, the report from Diplomat said.
The country shares land borders with Saudi Arabia to the west, the UAE to the northwest and Yemen to the southwest.
"Cargo offloaded from Indian ships at the Omani ports of Salalah and Duqm, could be trucked across to Saudi Arabia, Yemen, the UAE and beyond, bypassing the Strait of Hormuz," the report noted.
"Importantly, Oman's Musandam peninsula, located at the north of the country, reaches into the strategic Strait of Hormuz. Oman thus shares the entrance to the Hormuz Strait with Iran on the other side," the report added.
The media house cited Ajay Srivastava, founder of the Global Trade Research Initiative who pointed out Oman's strategic location as the reason which caused India's trade with it to surge as attacks and closures of the Strait of Hormuz drove down India's trade with other Gulf countries.
Imports from Oman jumped from $430 million in April 2025 to nearly $1.5 billion in April 2026 up almost 246.4 per cent, driven by increased purchases of crude oil and urea after shortages reduced supplies from other Gulf states.
India-Oman trade relationship already includes substantial cooperation in hydrocarbons, LNG, fertilizers, and petrochemicals.
CEPA creates a more predictable framework for investment and supply arrangements, reducing transactional uncertainty and encouraging long-term contracts.
The CEPA immediately grants 100 per cent duty‑free market access in Oman to 98 per cent of tariff lines covering 99.38 per cent of India's exports to that market, up from the pre‑CEPA system of zero‑duty access for 15.3 per cent of exports, a recent report said.
Sectors dominated by small businesses such as iron and steel, textiles, leather, auto components and industrial equipment could see large international orders after the agreement, it added.
— IANS
Reader Comments
It's impressive how Oman's Duqm and Salalah ports sit outside Hormuz. The idea of trucking cargo through Saudi and UAE is smart, but I wonder about the logistics and security of those land routes. Still, a big win for our trade relations. Hope it creates jobs back home too.
As someone who lived in Muscat for a few years, I can say Omanis are very friendly and business-minded. This CEPA is a logical next step. The 246% jump in imports is insane but shows how quickly India adapts. I just hope we don't become too dependent on a single partner again.
Finally some good news! The government deserves credit for moving fast after the Hormuz crisis. But let's be real—the real test is implementation. Small businesses in iron and steel need clear guidelines, not just numbers on paper. Hope our exporters are ready to seize this opportunity. 👏
Impressive that Oman's Musandam peninsula actually shares the entrance to Hormuz. This isn't just about trade bypassing the strait—it's about having a friend at the door. The 98% duty-free access is huge for Indian manufacturers. A well-negotiated deal that benefits both sides.
I'm cautiously optimistic. The increase in urea and crude imports is good, but what about our domestic production? We should use this CEPA to secure energy while also ramping up our own refining and fertilizer capacity. Also, infrastructure at Mundra and Kandla needs upgrading to handle this new trade flow
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