India and Oman’s Comprehensive Economic Partnership Agreement (CEPA) came into effect today amid the ongoing US-Iran war that has severely disrupted maritime traffic through the strategically vital Strait of Hormuz. The pact, signed during Indian Prime Minister Narendra Modi’s visit to Muscat in December last year, grants duty-free access for India’s labor-intensive exports to Oman. Indian Commerce and Industry Minister Piyush Goyal announced the implementation, calling it a milestone for expanding markets, boosting exports, attracting investment, and creating jobs.

The Hormuz Strait handles about 20 percent of global oil consumption and 25 percent of seaborne oil trade, but conflict has tightened Iranian control, disrupting India’s energy imports from Gulf states. Oman’s ports, including Salalah and Duqm, remain operational due to their location outside the strait, making Oman a reliable trade and energy route during regional instability.

Under CEPA, Oman will eliminate tariffs on 98.08 percent of its tariff lines, covering 99.38 percent of India’s exports, while India will reduce or remove tariffs on 78 percent of its lines. The agreement is expected to strengthen bilateral trade, though Oman’s small market size may limit export growth.