India-Oman Free Trade Agreement (CEPA) Enters into Force on 1 June 2026

On 1 June 2026, the free trade agreement between India and Oman came into effect. The deal had been signed in December 2025 and takes the formal name of the Comprehensive Economic Partnership Agreement (CEPA). A Free Trade Agreement (FTA) is a treaty between two or more countries that reduces or removes customs duties (taxes charged on goods crossing a border) and eases other trade barriers, so that goods and services can move between them more cheaply. A CEPA is a wider type of FTA: besides trade in goods, it also covers areas such as services, investment and economic cooperation. The India-Oman CEPA therefore aims to make trade between the two countries smoother and more predictable.

The agreement is significant because of where Oman sits on the map. Most Gulf countries ship their goods through the Strait of Hormuz, a narrow stretch of sea that is a major route for the world's oil. A large part of Oman's coastline, however, lies outside this strait, along the Gulf of Oman and the Arabian Sea. This means ports such as Salalah and Duqm can keep working even when traffic through the strait is disrupted. Against the backdrop of tension in West Asia, India sees Oman as a steadier gateway to the region. In the financial year 2024-25, two-way trade between India and Oman stood at about $10.61 billion.

Under the CEPA, Oman has agreed to remove customs duties on 98% of its tariff lines (a tariff line is a single category of goods in the customs list), covering about 99% of the value of India's exports. This zero-duty access helps Indian products such as petroleum goods, machinery, iron and steel, rice, ceramics and personal-care items become cheaper and more competitive in the Omani market. Earlier, while most Indian goods faced an average duty of around 5%, some items were taxed at rates as high as 100%; removing these duties is expected to widen the door for Indian exporters.

For India, the deal also strengthens energy security, meaning a more reliable supply of fuel and related inputs. Oman supplies India with crude oil, liquefied natural gas (LNG), fertilisers, methanol and ammonia. India in turn exports machinery, naphtha, petrol, rice, iron and steel articles, and electronics such as smartphones and electrical panels, where there is room to grow. Because Oman has a small population of around 5.2 million, the total size of the market is limited, so the gains for India come more from secure supply and a dependable trade partner than from a very large rise in export volumes.

Aspirants should remember the key facts: the India-Oman CEPA was signed in December 2025 and entered into force on 1 June 2026; CEPA is a broad form of FTA covering goods, services and investment; Oman gives zero-duty access on 98% of tariff lines covering 99% of India's export value; and Oman's location outside the Strait of Hormuz makes it a strategically useful trade gateway for India in West Asia.