India, Oman Trade Deal To Boost Exports Of Petroleum, Machinery: GTRI

The free trade pact between India and Oman, slated to be signed on Thursday, will provide greater market access to domestic products such as petroleum, machinery, rice, iron and steel articles, think tank GTRI said.

Currently, over 80% of Indian goods enter Oman at an average tariff of around 5%, but duties range widely from zero to as high as 100% on select products such as certain meats, alcohol and tobacco, it said.

'Tariff elimination under the CEPA (comprehensive economic partnership agreement) is expected to improve competitiveness for Indian industrial exports, though sustained growth will depend on quality upgrades and product differentiation in Oman’s relatively small market,' Global Trade Research Initiative (GTRI) Founder Ajay Srivastava said.

He said for India, the main gains lie in merchandise exports.

India’s exports to Oman stood at $4.1 billion in FY25, led by naphtha ($747.6 million) and petrol ($561 million), alongside calcined alumina ($313 million), machinery ($231 million), aircraft ($165 million), rice ($182 million), iron and steel articles ($120 million), beauty and personal care products ($128.6 million) and ceramic products ($79.9 million).

India is also expected to seek streamlined approval pathways for pharmaceutical products already cleared by regulators such as the US FDA, the UK’s MHRA and the European Medicines Agency, similar to provisions included in its UAE agreement, he said.

Oman, in turn, stands to gain from improved access to the Indian market for energy and industrial inputs, he said.

According to the GTRI, India imported $6.6 billion worth of goods from Oman in FY’2025, dominated by crude oil ($1.1 billion), liquefied natural gas ($1.1 billion) and fertilisers ($1.1 billion).

'Chemical inputs such as methyl alcohol ($435 million) and anhydrous ammonia ($382.4 million), along with petroleum coke ($315 million), are critical for India’s agriculture, chemicals, cement and power sectors,” he said adding most of these items already enjoy low tariffs under India’s other trade pacts, suggesting the CEPA will reinforce existing supply chains rather than radically reshape trade flows.

Despite its promise, he said, the pact has clear limitations. Oman’s population of about five million and GDP of roughly $115 billion constrain the scale of long-term trade expansion, especially when compared with India’s $4 trillion economy and 1.4 billion consumers.

“With more than 6,000 India–Oman joint ventures and Indian investments exceeding $7.5 billion, particularly in Oman’s Sohar and Salalah free zones, the CEPA is as much about geopolitics and regional presence as it is about tariffs. For India, it represents another step in cementing its economic footprint in the Middle East,” Srivastava said.

The agreement aims to substantially reduce or eliminate tariffs on a wide range of goods, liberalise services trade and facilitate investment flows. Bilateral trade between the two countries stood at about $10.5 billion in 2024–25.