A trade deal that covers nearly all of India’s exports sounds like a clean win — until you look at the import side of the ledger.
The India Oman FTA, formally called the Comprehensive Economic Partnership Agreement, takes effect on June 1, 2026 — making it the fifth bilateral trade pact implemented under the current government since 2014. Union Commerce Minister Piyush Goyal confirmed the date after meetings with an Omani delegation, noting that Oman will grant duty-free access on roughly 98 per cent of its tariff lines, covering over 99 per cent of Indian exports by value. Textiles, leather goods, agricultural produce, iron and steel, marine products, and electrical machinery are among the sectors that stand to gain immediate zero-duty entry into Oman.
India’s reciprocal offer is substantial but narrower. New Delhi will reduce tariffs on approximately 77.8 per cent of its tariff lines — around 12,556 product categories — covering about 95 per cent of imports from Oman by value. Omani dates will receive zero-duty access up to 2,000 tonnes annually, while concessions also extend to gum arabica, frankincense, marble, and select petrochemical products. The petrochemical concessions were the most contested element during negotiations, with domestic producers of polypropylene, polyethylene, and PVC warning that Oman’s feedstock subsidies — raw materials account for 65–70 per cent of production costs — could hand Omani firms a compounding advantage.
Placing this deal against the trade trajectory tells a more layered story. Bilateral trade climbed from roughly $8.9 billion in FY2024 to $10.6 billion in FY2025 and then to $11.2 billion in FY2026 — a cumulative rise of about 25 per cent over two years. But India’s trade deficit with Oman ballooned from a near-balanced $94 million in FY2024 to $2.48 billion in FY2025, driven by a 44.8 per cent surge in imports (mostly petroleum products and urea) even as exports to Oman actually fell 8.1 per cent that year. By FY2026, bilateral trade remained tilted: exports stood at $4.02 billion against imports of $7.16 billion. So while India has secured the wider tariff opening, the current flow of goods favours Oman — and the concessions on petrochemicals could keep that tilt in place.
For context, previous FTAs under the current government show a mixed record on flipping trade deficits. The India-UAE CEPA (implemented May 2022) expanded two-way trade but India’s deficit with the UAE has persisted. The India-Australia ECTA (December 2022) boosted certain export lines but broad gains took longer than projected. Indian industry bodies have themselves flagged that older pacts with Japan, South Korea, and ASEAN — signed under the previous government — saw imports surge while exports stayed flat. Whether the Oman CEPA breaks that pattern depends largely on how quickly Indian textile and MSME exporters can operationalise the duty advantages, and whether the petrochemical concessions create meaningful margin pressure for domestic producers.
There is a strategic dimension worth noting. Oman has emerged as India’s single largest LNG supplier in early 2026, accounting for 30–31 per cent of total LNG imports during supply disruptions linked to Strait of Hormuz tensions. India’s petroleum gas imports from Oman nearly doubled from $0.7 billion in FY2022 to $1.4 billion in FY2026. The CEPA, then, is not purely a trade instrument — it also deepens an energy-security relationship that has become operationally critical. With over 6,000 Indian enterprises already operating in Oman and cumulative FDI inflows from Oman crossing $640 million, the commercial ties run deeper than headline tariff numbers suggest.
If there is one forward scenario to watch, it is this: should Indian textile and manufactured-goods exporters capture even a modest share of Oman’s $6–7 billion annual import basket — leveraging the zero-duty window — FY2027 export data could begin narrowing the deficit. But if the pattern of earlier FTAs repeats, where import liberalisation moves faster than export uptake, the deficit could widen before it corrects. Investors in export-oriented textile, leather, and marine-product companies should track the first two quarters of implementation data closely, while petrochemical-sector shareholders should watch for any margin compression linked to the Omani concessions. The deal is signed, the tariffs are set — what matters now is execution.
CBIC — Central Board of Indirect Taxes and Customs publishes the updated tariff schedules under the India-Oman CEPA.
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This article is journalism and educational commentary, not investment advice. The author is not a SEBI-registered Research Analyst. Figures should be independently verified against official filings before any financial decision.
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