On June 1, 2026, the Comprehensive Economic Partnership Agreement (CEPA) between India and Oman enters into force. Signed during Prime Minister Narendra Modi’s December visit to Muscat and since ratified by Royal Decree, it makes Oman India’s second CEPA partner in the Gulf after the United Arab Emirates. The mechanics are striking from day one: 98.08% of Oman’s tariff lines covering 99.38% of India’s export value fall to zero duty. Indian exports worth roughly $3.6 billion that until now paid duties of up to 5% become instantly cheaper at the Omani border. Bilateral trade, already near $11 billion and rising, has a clear runway.
But to read this agreement as a tariff schedule is to miss its meaning. Consider the precedent. Four years after the India–UAE CEPA took effect, bilateral trade has crossed $100 billion for a second consecutive year — $101.25 billion in 2025-26 — with non-oil commerce now roughly two-thirds of the total and the two governments have lifted their sights to $200 billion by 2032. Tariff lines did not produce that. Confidence did. A CEPA’s deepest export is certainty.
We are signing this agreement in an unkind season for global commerce. Investment flows are nervous, supply chains are being redrawn under political pressure and “uncertainty” has shifted from a risk to be managed into the operating environment itself. Even Oman — with one of the Gulf’s most stable outlooks — saw FDI inflows contract by about a third in 2025 even as its cumulative FDI stock kept climbing, to RO 31.4 billion: capital that is committed for the long term but cautious in the short. In that climate, a CEPA is not paperwork; it is an instrument of predictability. It tells a manufacturer in Surat or a founder in Bengaluru that the rules in Oman are fixed, the duties are zero and the welcome is institutional rather than discretionary. When capital is anxious, predictability is the highest-yielding asset a nation can offer — and Oman is offering it.
Here is the point lost in the tariff arithmetic. Oman is the only Gulf economy that holds both a free trade agreement with the United States (since 2006) and now a CEPA with India. A product that qualifies as “Made in Oman” under the agreement’s rules of origin can reach the Indian and American markets duty-free from the same production line. Layer on Oman’s GCC membership and the India–GCC FTA now under active negotiation and the geometry becomes clear: Oman is not the end of the journey — it is the junction.
This reframes the opportunity for Indian business. The instinctive question is, “What can I sell into a market of five million people?” The better question is, “What can I make in Oman to serve the GCC’s 60 million consumers, the 2.6 billion across Asia and Africa; and the US market — on preferential terms I cannot get from home?” Engineering goods, pharmaceuticals, food processing, chemicals, electronics, textiles and gems are precisely the sectors this CEPA liberalises and precisely the ones served by Omani free zones at Suhar, Salalah, Al Duqm and Khazaen, where 100% foreign ownership, tax holidays of up to 25 years and single-window licensing already exist.
Oman’s location is not a brochure line; it is a balance-sheet item. Suhar, Salalah and Al Duqm sit outside the Strait of Hormuz. For Indian energy and trade flows, that is supply-chain insurance against the region’s most expensive chokepoint a consideration now reflected in discussions around alternative India–Middle East energy and logistics corridors designed to reduce dependence on Hormuz. Oman has already become a vital LNG supplier to India during recent disruptions. The CEPA is the legal scaffolding that lets Indian capital invest in turning that geography into commercial advantage.
THE PRIVATE SECTOR IS THE REAL ENGINE
And it is the private sector, not the communiqué, that will decide whether this potential is realised. India today runs the world’s third-largest startup ecosystem — more than 157,000 recognised startups and over 110 unicorns — while its MSMEs already generate close to 40% of exports and are being asked to anchor the country’s march towards a $7 trillion economy. That entrepreneurial energy now has a Gulf runway. The UAE CEPA showed how quickly small and mid-sized firms move when barriers fall: it was their gems, engineering goods, electronics and agri-exports — not the headline conglomerates alone — that pushed trade past $100 billion, which is why New Delhi rightly frames these agreements as opportunities “for the private sector”.
Oman should read the same signal. Across the GCC, some 675,000 formal SMEs already contribute up to 63.5% of non-oil GDP and one in four jobs; in Oman, SMEs sit at the heart of Oman Vision 2040. The CEPA’s services and mobility terms — commitments across 127 sub-sectors and a rise in the intra-corporate-transferee ceiling from 20% to 50% — are tailor-made for IT, fintech, healthcare, engineering and education ventures. An Indian SaaS start-up can base its regional arm in Muscat; an Omani agri-tech or logistics SME can plug into Indian supply chains and capital. The winners will be the firms small enough to be nimble and ambitious enough to treat two markets as one.
For Indian investors and traders, my counsel is concrete: do not treat Oman as an export destination alone. Establish origin-compliant manufacturing, base your regional services and innovation teams here and use the mobility chapter in full. India’s own economy — among the world’s most open and fastest-growing, a 1.4-billion-consumer market that has opened 94.81% of its import value to Omani goods — is an equally generous invitation in the other direction, for Omani petrochemicals, metals, minerals and downstream products to find real demand.
For Oman, the discipline is just as clear. We must not settle for being a transit point. Value is captured only if we build export-capable industrial clusters, deepen Omani skills through joint ventures and ensure our SMEs climb into the supply chains this investment creates. That is the difference between hosting trade and owning growth.
A GAME-CHANGER — IF WE TREAT IT AS ONE
More than 6,000 Indian companies already operate in Oman, anchored by a Joint Investment Fund that predates this agreement by fifteen years. The CEPA does not invent the relationship; it institutionalises and accelerates it at precisely the moment the world needs reliable corridors. India gains energy security, logistics resilience and a Gulf launchpad. Oman gains capital, technology and a committed partner in its Oman Vision 2040 journey beyond oil. The IMF has noted that Oman’s reforms are strengthening its stability and outlook; and three rating agencies have returned the Sultanate of Oman to investment grade.
The agreement that takes effect on June 1 will be remembered not for the duties it removed, but for the businesses it made possible. The tariff lines are the invitation. The opportunity is what we build on the other side of them.
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