The Pulse | Economy | South Asia

Why the India-Oman CEPA is Special

Much of Oman’s coastline lies outside the Strait of Hormuz. With CEPA kicking in on June 1, India will be looking to benefit from the agreement and Oman’s geography.

Port of Duqm in Oman.

The India-Oman Comprehensive Economic Partnership Agreement (CEPA), which was signed on December 18, 2025, during Indian Prime Minister Narendra Modi’s visit to Muscat, came into effect on June 1.

India has similar agreements with several other countries, including in the Gulf region, such as the United Arab Emirates (UAE), for example. The CEPA with Oman, however, is particularly valuable to India. Recent developments underscore its importance.

The India-Oman CEPA has kicked into effect at a critical time for the Indian economy. India imports over 88 percent and 50 percent of its crude oil and gas needs, respectively. Gulf countries are an important source in this regard; India relies heavily on the region for crude oil, LNG, and fertilizers, with two-thirds of this supply coming from Qatar, the UAE and ​Oman.

India’s trade with the Gulf has been heavily impacted by the Strait of Hormuz crisis since March this year. Imports from the Gulf dropped from around $15 billion in April 2025 to $9.8 billion in April 2026. Likewise, Indian exports to the region declined from $4.4 billion to $2.7 billion in this period.

Amid this upheaval in India’s trade with the Gulf region, Oman emerged as a lifesaver. The numbers speak for themselves. Trade with Oman has boomed. Imports from Oman grew from $430 million in April 2025 to nearly $1.5 billion in April 2026 — a whopping 246.4 percent — driven by India’s stepped-up purchase of crude oil and urea in the wake of the shortages due to the trade disruption following the Hormuz crisis. Trade with other Gulf countries dropped sharply in this period.

Oman’s location makes it a highly valuable partner for India.

Located along the southeastern coast of the Arabian Peninsula, Oman lies at the intersection of the Arabian Sea, the Sea of Oman, and the Arabian Gulf. 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.

Oman’s value as a trade partner amid the Strait of Hormuz crisis was boosted by another feature of its geographic location.

Unlike other Gulf countries, much of Oman’s coastline lies outside the Strait of Hormuz. As Ajay Srivastava, founder of the Global Trade Research Initiative, pointed out, since Oman’s major ports — the Port of Salalah and Port of Duqm — lie outside the Strait of Hormuz, they “remain accessible even when traffic through the Strait is disrupted. As a result, Oman can continue serving as a reliable trade and energy gateway during periods of conflict or instability in the Gulf.”

This is why India’s trade with Oman surged as attacks........

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