The India-Oman Comprehensive Economic Partnership Agreement (CEPA), which entered into force on Monday, eliminates tariffs on most Indian exports to Oman, covering about 99% of the value of India’s shipments to the Gulf state. The agreement comes at a time when India is seeking to safeguard critical supply chains amid ongoing turmoil in the Middle East following U.S.-Israeli attacks on Iran on Feb. 28.

Indian officials and trade experts say the pact assumes added significance as the closure of the Strait of Hormuz threatens one of the world’s most important energy and shipping routes. Despite efforts to diversify sourcing and transport networks, India remains dependent on the corridor for roughly 30% of its crude oil imports and about 90% of its liquefied petroleum gas imports.

In a statement, India’s Ministry of Commerce and Industry said Oman’s ports of Sohar, Duqm and Salalah would provide Indian exporters with enhanced access to Gulf and East African markets, helping establish what it described as a new trade gateway for Indian businesses.

Anil Wadhwa, a former Indian ambassador to Oman and a distinguished fellow at the Vivekananda International Foundation, said the agreement had acquired immediate strategic relevance because of the regional crisis.

“The coming into force of the CEPA between India and Oman has immediately gained significance due to the crisis in the Middle East and the closure of the Strait of Hormuz,” Wadhwa said, adding that the pact offered India alternative logistics channels, transshipment facilities and stronger commercial linkages at a time of growing uncertainty in global supply chains.

He said the agreement would not fully shield India from the broader economic consequences of a prolonged regional conflict but could help mitigate disruptions by preserving access to key trade corridors.

The CEPA is India’s second bilateral trade agreement with a member of the Gulf Cooperation Council after a similar pact with the United Arab Emirates signed in 2022. For Oman, the deal is its second bilateral free trade agreement after its accord with the United States in 2006.

Oman is India’s second-largest trading partner in the Gulf region, with bilateral trade exceeding $11 billion in the 2025-26 fiscal year.

Industry groups view the agreement as a mechanism to strengthen India’s manufacturing exports while reducing logistical dependence on routes affected by the Hormuz crisis.

Manish Mohan, senior director at the Confederation of Indian Industry, said the prolonged disruption of shipping through the strait had heightened concerns over fuel imports, fertilizer supplies and freight costs.

India, the world’s second-largest fertilizer consumer after China, uses more than 60 million tonnes of fertilizer annually. The conflict involving Iran has affected fertilizer supply chains, with Gulf producers accounting for about one-third of India’s imports of urea and phosphate-based fertilizers.

Mohan said Oman’s location outside the Strait of Hormuz increased its value as a commercial hub and alternative entry point for Indian imports if regional instability persists.

The agreement is also expected to support investment flows and deepen economic ties between the two countries, while providing Indian exporters with improved access to markets across the Gulf and eastern Africa through Omani ports and logistics infrastructure.

According to Iran’s ISNA news agency, Araghchi was due to convey “Iran’s positions and views on the framework of any understanding to completely end the war” during fresh meetings with Pakistani officials.

The minister had visited Islamabad a day earlier, meeting Army Chief Asim Munir, Prime Minister Shehbaz Sharif and Foreign Minister Ishaq Dar before flying to Muscat, where he met Haitham bin Tariq as regional diplomacy intensified.Other Iranian envoys returned to Tehran for consultations and to obtain instructions related to ending the conflict, ISNA reported.

Before those talks, the White House had said Trump’s peace envoy Steve Witkoff and his son-in-law Jared Kushner were preparing to travel to Pakistan for further indirect negotiations.Trump later scrapped the trip, telling Fox News there was no reason to continue “sitting around talking about nothing,” while criticizing Tehran’s negotiating position.

“They gave us a paper that should have been better and interestingly immediately when I canceled it, within 10 minutes, we got a new paper that was much better,” Trump said, without giving details.Asked whether canceling the trip meant a return to open conflict, Trump said: “No, it doesn’t mean that. We haven’t thought about it yet.”Araghchi described his initial Pakistan visit as “very fruitful” but questioned Washington’s seriousness about diplomacy.“

Have yet to see if the U.S. is truly serious about diplomacy,” he said.Pressure for a diplomatic breakthrough has intensified as the Strait of Hormuz remains effectively blocked, disrupting one of the world’s most important oil and gas shipping routes and driving energy prices sharply higher.

Iran’s Islamic Revolutionary Guard Corps said it had no intention of lifting the blockade.“Controlling the Strait of Hormuz and maintaining the shadow of its deterrent effects over America and the White House’s supporters in the region is the definitive strategy of Islamic Iran,” the Guards said on Telegram.

The United States has responded by tightening restrictions on Iranian ports and increasing maritime enforcement actions against vessels linked to Tehran’s energy exports.Iran’s military accused Washington of “blockading, banditry and piracy” and warned that continued pressure would trigger a response.

Regional tensions also escalated on the Lebanese front, where Israeli Prime Minister Benjamin Netanyahu ordered strikes against Hezbollah targets after accusing the group of violating a ceasefire recently extended for three weeks.

Lebanese state media reported Israeli strikes in several southern districts, while Lebanon’s health ministry said attacks in Nabatieh and Bint Jbeil killed six people.Israel’s military said it had killed multiple Hezbollah operatives, including fighters allegedly transporting weapons.

Although Trump had earlier expressed optimism about peace after meetings with Israeli and Lebanese envoys, Hezbollah parliamentary bloc leader Mohammed Raad urged Lebanon to withdraw from negotiations, warning that any agreement without broader consensus would be politically unsustainable.

Araghchi is expected to travel to Moscow after completing the Islamabad consultations.