The June 1 implementation of CEPA removes tariffs on 98% of Omani goods, offering India an alternative route as Iran tensions escalate.
India’s Comprehensive Economic Partnership Agreement with Oman entered into force on June 1, providing an alternative trade corridor as Iran-related disruptions tighten access to the Strait of Hormuz. The pact, ratified by Oman’s Sultan in February, eliminates customs duties on 98% of Omani tariff lines immediately.
Negotiations concluded late last year before the current geopolitical flare-up, yet the timing now aligns with heightened shipping risks. Analysts note the deal could redirect a portion of India’s energy and commodity flows away from the vulnerable Hormuz chokepoint.
Markets have yet to price a material shift, but traders are monitoring freight rates and crude differentials for early signs of rerouting.