India–Oman Bilateral Relations
17.12.2025
India–Oman Bilateral Relations
Context
In December 2025, Prime Minister Narendra Modi visited the Sultanate of Oman as part of a three-nation tour (Jordan, Oman, and Ethiopia). The visit coincided with 70 years of India–Oman diplomatic relations and took place amid heightened instability in West Asia, underscoring Oman’s role as a “stabilizing bridge” in the region.
About the News
Background
- India and Oman established diplomatic relations in 1955, making Oman one of India’s oldest partners in the Gulf.
- The relationship was elevated to a Strategic Partnership in 2008.
- Oman has consistently followed a foreign policy of neutrality, moderation, and dialogue, maintaining balanced ties even during periods of intense regional polarization.
Key Highlights of the 2025 Visit
1. Comprehensive Economic Partnership Agreement (CEPA)
- India and Oman are close to finalizing a CEPA, expected to eliminate or reduce tariffs on around 98% of Indian goods.
- The agreement aims to expand trade in services, MSMEs, pharmaceuticals, IT, and logistics, moving bilateral trade toward a rules-based framework.
2. Strategic Access to Port of Duqm
- Strengthening the 2018 logistics agreement for the Port of Duqm, granting the Indian Navy a vital facility for refuelling, maintenance, and turnaround.
- Duqm enhances India’s operational reach in the Western Indian Ocean, especially near the Strait of Hormuz.
3. Green Energy and Energy Transition
- Launch of a joint roadmap for Green Hydrogen and Green Ammonia, combining:
- Oman’s abundant solar and wind potential, and
- India’s expertise in electrolysers, engineering, and project execution.
- Oman’s abundant solar and wind potential, and
4. Digital Public Infrastructure (DPI)
- Expansion of RuPay–UPI linkages (launched in 2022) to enable seamless cross-border digital payments.
- Directly benefits the 675,000-strong Indian diaspora in Oman.
5. Knowledge and Education Corridor
- Discussions on establishing offshore campuses of IITs and IIMs in Oman.
- Aims to deepen cooperation in higher education, skilling, and knowledge services.
Key Sectors of Cooperation
1. Defence and Maritime Security
- Oman is the first Gulf country to conduct tri-service military exercises with India:
- Naseem Al Bahr – Naval exercise
- Al Najah – Army exercise
- Eastern Bridge – Air Force exercise
- Naseem Al Bahr – Naval exercise
- Port of Duqm acts as a strategic enabler for:
- Anti-piracy operations
- Humanitarian Assistance and Disaster Relief (HADR)
- Maritime domain awareness near the Strait of Hormuz
- Anti-piracy operations
2. Trade, Investment, and Economic Cooperation
- Bilateral trade reached USD 10.61 billion in FY 2024–25, though still heavily commodity-driven.
- The Oman–India Joint Investment Fund (OIJIF) has deployed over USD 600 million in Indian infrastructure, logistics, and industrial sectors.
- Over 6,000 joint ventures operate across both countries, with Indian investments concentrated in the Sohar and Salalah Free Zones.
Evolution of the Partnership: A Comparison
|
Aspect |
Traditional Focus (Pre-2018) |
Emerging Strategic Focus (2025) |
|
Primary Driver |
Hydrocarbons & remittances |
Technology, fintech, green energy |
|
Trade Model |
Ad-hoc commercial links |
Rules-based framework (CEPA) |
|
Security Role |
Friendly port calls |
Operational logistics hub (Duqm) |
|
Connectivity |
Maritime shipping lanes |
IMEC & digital payment rails (UPI/RuPay) |
Key Challenges
- Regional Volatility
- Conflicts in West Asia, including the Red Sea crisis, threaten maritime trade routes and investor confidence.
- Conflicts in West Asia, including the Red Sea crisis, threaten maritime trade routes and investor confidence.
- Trade Concentration
- Over 70% of India’s imports from Oman are still limited to petroleum and urea, making trade vulnerable to price fluctuations.
- Over 70% of India’s imports from Oman are still limited to petroleum and urea, making trade vulnerable to price fluctuations.
- Geopolitical Sensitivities
- Rising Chinese naval presence in the Indian Ocean Region (IOR) increases strategic competition, making logistics arrangements like Duqm geopolitically sensitive.
- Rising Chinese naval presence in the Indian Ocean Region (IOR) increases strategic competition, making logistics arrangements like Duqm geopolitically sensitive.
- Omanisation Policy
- Domestic labor policies prioritizing local employment may affect low-skill Indian workers, necessitating a shift toward high-skill migration.
- Domestic labor policies prioritizing local employment may affect low-skill Indian workers, necessitating a shift toward high-skill migration.
Way Forward
- Fast-track CEPA Implementation: Prioritize early-harvest measures in MSMEs, pharmaceuticals, and standards harmonization.
- Deepen Maritime Cooperation: Move from exercises to coordinated patrols, intelligence sharing, and protection of undersea critical infrastructure.
- Green Hydrogen Ecosystem: Develop a Green Energy Corridor, enabling Indian firms to manufacture electrolysers in Oman for global markets.
- Institutionalize Skill Mobility: Align India’s vocational training ecosystem with Oman Vision 2040, ensuring the diaspora remains a high-value “living bridge”.
Conclusion
The India–Oman relationship has evolved from a civilizational and energy-based partnership into a high-utility strategic collaboration. By advancing CEPA, strengthening maritime access at Duqm, and expanding cooperation in digital infrastructure and green energy, both countries are future-proofing their ties against regional instability while offering a scalable model for India’s broader engagement with the Gulf Cooperation Council (GCC).