India and Oman Relations

Introduction: The Quiet Anchor of the Gulf

Oman is India’s oldest treaty partner in the Arab world and, in strategic terms, the most quietly valuable. It occupies the southern shore of the Strait of Hormuz, controls the approaches to the Arabian Sea, and — crucially — its principal ports at Duqm and Salalah lie outside the Strait, giving India access to the Gulf’s energy trade that does not depend on passage through a chokepoint that can be closed.

Oman’s distinctive foreign policy reinforces its value. Alone among the Gulf states it maintains working relations with Iran, Israel, Saudi Arabia and the West simultaneously, and has repeatedly served as a discreet mediator — hosting the back-channel that produced the Iran nuclear talks. For India, which must balance Iran against the Gulf Arabs, that neutrality is an asset in itself.

Why Oman Matters — Four Strategic Prizes Geography: the southern shore of the Strait of Hormuz; Duqm and Salalah lie outside it. Naval access: berthing and logistics at Duqm extend India’s reach in the western Indian Ocean. Mediation: the Gulf’s trusted neutral — a channel to Iran when others have none. Diaspora: roughly 700,000 Indians, one of the largest expatriate communities in Oman.

Historical Background

Maritime links across the Arabian Sea are millennia old, sustained by monsoon trade between Gujarat, Kerala and the Omani coast. Oman was the first Gulf state to establish diplomatic relations with independent India, and the two signed a Treaty of Friendship, Navigation and Commerce in 1953 — the foundation of the oldest such relationship India holds in the region.

Ties were upgraded to a Strategic Partnership in 2008. The relationship has been sustained by unusually consistent goodwill: Indian-origin merchant families have been established in Muscat for generations, and the Sultanate has historically extended privileges to the Indian community, including land for temples.

Evolution of the Partnership

Year	Milestone
1953	Treaty of Friendship, Navigation and Commerce — India’s oldest such treaty in the Arab world
1955	Formal diplomatic relations established
2008	Relationship elevated to a Strategic Partnership
2018	Agreement granting the Indian Navy access to the Port of Duqm for logistics and maintenance
Dec 2025	India–Oman Comprehensive Economic Partnership Agreement (CEPA) signed in Muscat
June 2026	CEPA enters into force

The Comprehensive Economic Partnership Agreement (CEPA)

The CEPA is the centrepiece of the modern relationship. Signed in December 2025 and in force from June 2026, it is only the second comprehensive bilateral trade agreement Oman has concluded with any country — the first since its agreement with the United States in 2006.

CEPA at a Glance Oman grants immediate zero-duty access to roughly 99% of India’s exports by value, covering about 98% of tariff lines. Coverage extends beyond goods to services (over 120 sub-sectors), professional mobility and regulatory cooperation. Bilateral trade stood at approximately US$11.2 billion in FY 2025-26, up from about US$10.6 billion the previous year. Mobility provisions seek protection for the Indian workforce against tightening Omanisation employment quotas.

Strategically, the CEPA does more than lower tariffs. Oman’s free zones at Duqm and Sohar give Indian firms a manufacturing and re-export base from which to reach the wider GCC and East African markets — turning a bilateral trade pact into a gateway arrangement.

Areas of Cooperation

Defence and Maritime Security

Oman is India’s closest defence partner in the Gulf and the only one with which India exercises across all three services: Al Najah (army), Eastern Bridge (air force) and Naseem Al Bahr (navy) — the last being India’s longest-running naval exercise with any Arab state.

The 2018 agreement gives Indian naval vessels access to Duqm for berthing, logistics and maintenance, materially extending India’s operational reach in the western Indian Ocean and supporting anti-piracy deployments in the Gulf of Aden.

Oman also permits Indian military aircraft overflight and refuelling, and cooperation extends to maritime domain awareness and white-shipping information exchange.

Energy and Investment

Oman is a steady supplier of crude and LNG, and its position outside the Strait of Hormuz makes it a hedge against disruption there. Cooperation is broadening into green hydrogen, in which Oman has significant ambitions and Indian firms have begun to invest.

The Oman–India Joint Investment Fund channels sovereign and private capital into Indian projects, while Indian companies are active in Omani fertilisers, steel and petrochemicals.

Diaspora and People-to-People Ties

Around 700,000 Indians live and work in Oman — among the largest expatriate communities there — spanning construction, healthcare, education, retail and professional services. They are a major source of remittances and, unusually, enjoy a reputation for long-settled integration; Indian schools operate across the Sultanate and several Hindu temples in Muscat date back generations.

Connectivity

Oman sits on the maritime leg of India’s westward connectivity, complementing Chabahar in Iran and the India–Middle East–Europe Economic Corridor (IMEC). Proposals for an India–Oman undersea route and expanded shipping links aim to consolidate this position.

Issues and Challenges

Challenge	Explanation
Omanisation	Nationalisation of the workforce steadily reduces employment opportunities for Indian expatriates
Regional volatility	Conflict around Hormuz, Yemen and the wider West Asian crisis threatens shipping, energy flows and diaspora safety
Trade concentration	Commerce remains heavily weighted toward petroleum and petrochemicals, with a limited manufacturing base
Chinese presence	China has invested substantially in Duqm’s industrial zone, creating a competitive dynamic at the same port
Realising CEPA	Converting tariff concessions into actual export growth requires Indian firms to use Omani free zones in practice
Low visibility	The relationship’s quietness is a strength diplomatically but means it attracts little political or business attention in India

Way Forward

• Operationalise CEPA: publicise the tariff schedule to Indian exporters and use Duqm and Sohar free zones as bases for GCC and African markets.
• Deepen the Duqm relationship: move from access to a sustained logistics presence supporting Indian Ocean deployments.
• Diversify trade: build beyond hydrocarbons into green hydrogen, fertilisers, food processing, pharmaceuticals and digital services.
• Protect the diaspora: negotiate predictable treatment under Omanisation and expand skilling and mobility agreements.
• Use Oman’s convening power: leverage Muscat’s unique standing as an interlocutor with Iran and across the Gulf divide.
• Integrate with IMEC and Chabahar: treat Oman as a node in a single westward connectivity architecture rather than a standalone partner.

Conclusion

Oman is the least noticed and most reliable of India’s Gulf relationships. It carries no history of friction, no competing alignment and no ideological complication — only a steady accumulation of practical advantage: the oldest treaty, the first naval access, the widest exercise programme, and now the deepest trade agreement Oman has signed with anyone but the United States.

Its strategic logic is best captured by geography. In a region where India’s energy security depends on a strait that can be closed, Oman offers ports on the outside of it. That single fact, more than any declaration, explains why Muscat matters.