02-06-2026
Executive
Summary
The
India–Oman Comprehensive Economic Partnership Agreement (CEPA), effective from
1 June 2026, represents one of India`s most significant trade agreements in the
Gulf region. Under the agreement, Oman grants duty-free access to 99.38% of
India`s exports by value, covering 98.08% of tariff lines, creating a highly
favorable trade framework for Indian exporters.
Amid West Asia conflicts which has disrupted the supply chain of petroleum
products, Oman’s foreign trade advisor informed that the Oman is willing to
supply more fertilizers and petrochemicals to India. Bilateral trade between
India and Oman has already reached USD 11.18 billion in FY 2025-26, and the
CEPA is expected to accelerate this growth trajectory in the coming years. For
commodity markets, the CEPA has significant implications across energy,
petrochemicals, fertilizers, precious metals, engineering metals, and logistics
sectors. Oman is also expected to increase supplies of petrochemicals and
fertilizers to India, strengthening India`s raw material security.
02-06-2026
Key Highlights of the Agreement
Near Complete Duty Free Access
The biggest achievement of the
agreement is that Oman has granted100% duty-free
market access on 98.08% of its tariff lines, covering 99.38% of India`s export value. Earlier, only about 15%
of Indian exports entered Oman duty-free under the MFN regime. This
significantly improves the competitiveness of Indian products in Oman.
Boost
To Labour Intensive Sector
Sectors
which will be majorly benefitted due to this trade agreements are ; Gems &
Jewellery , Textile , Pharmaceuticals ,
Engineering Goods , Marine Products , Processed Foods , Automobiles ,Footwear.
These sectors are expected to witness export expansion and employment
generation due to this trade modification
02-06-2026
Trade
and Logistics Advantage
Amajor strategic feature of
the CEPA is Oman`s role as a logistics hub through the Port of Sohar, Port of
Duqm , Port of Salalah . These Ports provide Indian exporters access not only
to Oman but also in GCC markets, East Africa, Red Sea trade routes, Global
shipping lanes near the Strait of Hormuz. This improves competitiveness for
Indian commodity exports while reducing supply chain concentration risks.
Geopolitical & Strategic Importance
India becomes only the second country after the
United States to secure a comprehensive bilateral trade pact with Oman. This
gives India an important strategic position in the Gulf region. CEPA
Strengthens India`s presence in GCC trade , Enhances supply-chain resilience ,
Reduces dependence on single-region sourcing , and Creates a long-term economic
corridor between South Asia, the Middle East, and East Africa.
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Service Sector Liberalization
The India - Oman CEPA delivers one of the most
comprehensive services market access commitments secured by India in the Gulf
region. Oman has opened 127 service sub-sectors, including IT, engineering,
healthcare, education, finance, tourism, and professional services. The
agreement also enhances mobility for Indian professionals and easier movement
of skilled workers, creating new opportunities for service exports and
employment growth
02-06-2026
Commodity Market Implications
Energy, Petrochemicals & Fertilizers
Under the CEPA framework, Oman has offered to increase exports of petrochemicals and fertilizers to India. This is strategically important as India remains heavily dependent on imported feedstocks for fertilizers and downstream chemical industries. This will potentially impact improved fertilizer availability for Indian agriculture, Lower input costs for chemical manufacturers, greater supply diversification and most importantly enhanced energy security through closer Gulf Integration.
Strategic importance for gold and silver markets
one of the most direct beneficiaries of the
agreement is India`s gems and jewellery sector. Improved access to the Omani
market creates opportunities for Indian jewellery manufacturers to expand exports
and strengthen their presence in Gulf retail markets. This can increase demand
for refined gold used in jewellery fabrication and support growth across the
bullion value chain. CEPA itself is not a direct bullish catalyst for gold
prices. However, stronger jewellery exports and increased Gulf trade flows
could support physical demand for fabricated precious metal products over the
long term.
02-06-2026
India`s
Gold Import Policy and Potential Gold Exports to Oman
The Indian
government has repeatedly expressed concerns regarding excessive gold imports
and household hoarding because such imports increase the country`s trade
deficit and create foreign exchange outflows. Policymakers generally encourage
productive investments rather than passive accumulation of imported gold. When
imported gold is converted into jewellery and exported, substantial value
addition takes place within India. This process generates employment, boosts
manufacturing activity, creates export earnings, and contributes positively to
economic growth. If Indian manufacturers increase jewellery exports to Oman
under the CEPA framework, India could benefit through :
· Higher foreign exchange earnings
· Increased employment in the jewellery manufacturing sector.
· Greater utilization of refining and fabrication capacity
Engineering,
Metal and Manufacturing
All
engineering products receive zero-duty market access, replacing earlier tariffs
of up to 5%. Engineering exports to Oman are projected to increase
substantially by 2030. Key products will be Steel products, Industrial machinery,
Electrical equipment, Automobiles, Copper products. Higher export of electrical
equipment and wiring products are expected to increase demand for refined
copper and fabricated products. Also infra development n GCC countries can
increase demand for steel exports. Along with this CEPA also creates demand for
aluminium as manufacturing activity and logistics infrastructure could
increase.
02-06-2026
Trump Tariff Effect: Latest Updates and the Commodity Market Outlook
1) Latest Updates: The Fine-Tuning of Section 232 (June 2026)
After imposing sweeping broad tariffs earlier this year, including a 25% tariff on goods from Canada and Mexico and a 20% tariff on imports from China, the White House is now changing its strategy.
On June 1, 2026, President Trump signed a new proclamation modifying Section 232 tariffs on key metals, including steel, aluminium and copper. These changes are effective June 8, 2026 and include:
· Reduce Tariffs on Critical Equipment: Tariffs on imported agricultural machinery (including combines and harvesters) and residential HVAC systems will be reduced from 25% to 15% to ease cost pressures on American farmers and builders.
· New items taxed at 25%: Aluminium lithographic plates and steel racks have been added to the maximum 25% tariff bracket to further incentivise domestic production.
· 85% Rule: The foreign companies are now subject to the lower 10% duty rate if their capital equipment is at least 85% US-melted/poured steel or aluminium by weight (down from 95%)
02-06-2026
Trump Tariff Effect: Latest Updates and the Commodity Market Outlook
Latest Updates: The Fine-Tuning of Section 232 (June 2026)
After imposing sweeping broad tariffs earlier this year, including a 25% tariff on goods from Canada and Mexico and a 20% tariff on imports from China, the White House is now changing its strategy.
On June 1, 2026, President Trump signed a new proclamation modifying Section 232 tariffs on key metals, including steel, aluminium and copper. These changes are effective June 8, 2026 and include:
· Reduce Tariffs on Critical Equipment: Tariffs on imported agricultural machinery (including combines and harvesters) and residential HVAC systems will be reduced from 25% to 15% to ease cost pressures on American farmers and builders.
· New items taxed at 25%: Aluminium lithographic plates and steel racks have been added to the maximum 25% tariff bracket to further incentivise domestic production.
· 85% Rule: The foreign companies are now subject to the lower 10% duty rate if their capital equipment is at least 85% US-melted/poured steel or aluminium by weight (down from 95%)
02-06-2026
Impact on Industrial & Base Metals
The relentless push for domestic manufacturing has sent ripples through the base metals complex:
- Steel & Aluminum: The strict Section 232 enforcement has restricted the inflow of cheap foreign metals. While this has supercharged US manufacturing growth (which hit its fastest expansion rate in four years in May 2026), it keeps domestic US metal prices at a premium compared to global benchmarks.
- Copper: Positioned as a strategic asset for technology and energy, copper imports face tighter scrutiny. While global supply chains face logistical disruptions, the new US incentives are aimed at forcing foreign manufacturers to source raw US copper and aluminum to avoid heavy penalties.
02-06-2026
Impact on Energy and Crude Oil
Energy remains one of the most volatile pieces of the tariff puzzle. When the broad 25% tariffs on Canada and Mexico were enacted in March, crude oil and energy imports were granted a lower 10% tariff rate.
- Supply Chain Friction: Because the US relies heavily on heavy Canadian crude for its domestic refineries, even a 10% levy adds billions in friction costs.
- Price Volatility: Geopolitical tensions combined with energy duties are keeping a firm floor under crude oil prices, forcing energy markets to price in a permanent "trade-war risk premium."
02-06-2026
Conclusion
The India - Oman CEPA should be viewed as a strategic trade and commodity corridor rather than merely a tariff-reduction agreement. The pact enhances India`s access to GCC and East African markets, improves supply security for critical industrial inputs such as petrochemicals and fertilizers, supports engineering and metal exports, and strengthens the country`s position in global value chains. For commodity investors and traders, the biggest opportunities lie in industrial metals, petrochemicals, fertilizers, logistics, and export-oriented precious metals manufacturing rather than direct bullion imports.
02-06-2026
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