Duty concessions under the comprehensive economic partnership agreement between India and Oman took effect on Monday, with the lower tariffs covering close to 95% of India’s imports from the Gulf state. The pact is the latest in a series of trade deals New Delhi has pursued to deepen commercial ties and steady an economy buffeted by external shocks.
The agreement comes into force at a difficult moment for India’s external accounts. The prolonged conflict in the Middle East has pushed oil prices higher and weighed on the rupee, which has slid toward record lows, while foreign portfolio investors have pulled out of Indian equities in large numbers since the start of the year.
Those pressures have framed the government’s economic messaging. Prime Minister Narendra Modi has appealed to citizens to favour domestically made goods, curb imported edible oils and pause gold purchases, and the authorities have followed through with steps such as raising import duties on gold and silver to ease the strain on the current account.
Trade with Oman is modest in the context of India’s overall commerce but strategically useful, given the Gulf country’s position at the mouth of the region’s shipping lanes and its role as a supplier of energy and petrochemicals. Lower duties are intended to smooth two-way flows and give Indian exporters improved access in return.
Economists expect India’s growth this year to be dented by the regional conflict, with the current account deficit projected to widen in the financial year ending March 2027. Against that backdrop, the government has leaned on trade agreements and selective tariff measures as tools to manage the squeeze.
Whether the Oman pact delivers a meaningful boost will depend on how quickly businesses take advantage of the new terms, but its timing — arriving as oil markets convulse over the Strait of Hormuz — underscores how closely India’s economic fortunes are tied to stability in the Gulf.