Oman Trade Deal To Open Gateway to the Region During West Asia Crisis
The importance of the agreement lies in Oman’s location, finds GTRI.
Chennai:The trade agreement with Oman, which comes into force from Monday, will like India with Gulf countries, Africa and Central Asia, at a time when the Strait of Hormuz is closed due to tensions. The ports in Oman can be corridors linking India to these regions.
The India–Oman Comprehensive Economic Partnership Agreement (CEPA), signed on December 18, 2025, came into force on Monday, becoming India’s fifth free trade agreement to be implemented in the past five years and its 15th overall.
Oman has a population of 55 lakh and a GDP of about $110 billion and hence trade gains to India will remain modest. The importance of the agreement lies in Oman’s location, finds GTRI.
Unlike most Gulf countries, which rely on shipping through the Strait of Hormuz, much of Oman’s coastline is located outside the Strait, directly on the Arabian Sea and the Gulf of Oman. This allows major ports such as Port of Salalah and Port of Duqm to 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 has been evident from the trade during the current crisis. India’s imports from major Gulf economies fell sharply from about $15 billion in April 2025 to $9.8 billion in April 2026 and India’s exports to the region dropped from $4.4 billion to $2.7 billion.
However, trade with Oman recorded good growth. India’s imports from Oman surged by 246.4%, rising from $430 million to nearly $1.5 billion, driven by higher purchases of crude oil and urea. India’s exports to Oman declined by only 10.3%.
“The experience shows that Oman can act as a dependable alternative trade and energy gateway for India when the Strait of Hormuz becomes risky or congested.,” said GTRI.
