Indian traders have been active across the Arabian Sea for centuries, and today, the Indian diaspora forms a crucial bridge connecting the subcontinent with the Gulf’s economies
In the rapidly shifting landscape of global commerce, Indian businesspersons are increasingly turning their gaze toward the Arabian Gulf — particularly the United Arab Emirates (UAE) and the Sultanate of Oman. What once were traditional destinations for labour migration and remittances have transformed into strategic hubs of trade, investment, and innovation. This confluence of opportunity — underpinned by demographic heft, favourable business climates, robust bilateral agreements, and converging economic visions — is positioning the UAE and Oman together as the next must-enter market for Indian entrepreneurs and investors.
Historical and demographic foundations: An Indian footprint in the Gulf
The economic engagement between India and the Gulf predates modern nation-state boundaries. Indian traders have been active across the Arabian Sea for centuries, and today, the Indian diaspora forms a crucial bridge connecting the subcontinent with the Gulf’s economies. In the UAE alone, Indian expatriates number approximately 4 million, making up over one-third of the country’s population and representing the single largest expatriate community there. In neighbouring Oman, Indians also constitute a significant share of the expatriate population, with estimates exceeding 1 million, highlighting the depth of cross-border social and economic links.
These large diaspora communities support not only labour markets but also form the backbone of entrepreneurial activity. In the UAE, Indian-owned and Indian-headed companies have become a dominant business presence. Data from the Dubai Chamber of Commerce shows that Indian businesses top the list of new foreign company registrations — with over 9,000 new Indian firms registered in the first half of 2025 alone — reflecting sustained growth in commercial confidence.
This demographic and entrepreneurial presence provides a natural foundation for bilateral commercial expansion: strong cultural ties, networks of trust, and consumer familiarity all lower barriers to market entry for Indian businesses.
Strategic economic partnerships: From UAE-Oman integration to India’s Gulf pivot
A major structural shift shaping the UAE-Oman commercial landscape is the growing economic integration between the two Gulf neighbours. The UAE is Oman’s largest trade partner, dominating both imports and exports — particularly in non-oil sectors. Non-oil trade has grown strongly in recent years, supported by logistics links, free trade corridors, and policy harmonisation. Joint ventures and large capital commitments — totaling over AED 129 billion in planned investment deals — have been signed to develop projects in renewable energy, green metals, infrastructure (including the Oman-Etihad Rail), and digital ecosystems. These agreements reflect both countries’ desire to diversify beyond hydrocarbons and build resilient, tech-driven economies. [Context from supplied text]
Critically for Indian businesspersons, this UAE-Oman economic synergy creates a wider, more interconnected market. Instead of treating the two nations separately, Indian investors and companies can now think in terms of a unified Gulf gateway: Dubai to Muscat and beyond.
Comprehensive Economic Partnership Agreement (CEPA): India-Oman’s game-changer
A watershed moment for Indian business interests in the region occurred in December 2025, when India and Oman signed a Comprehensive Economic Partnership Agreement (CEPA) This pact — India’s second in the Gulf after its 2022 CEPA with the UAE — signals a material recalibration of economic relations.
Key features of the India-Oman CEPA include:
- Tariff liberalisation: Oman agreed to provide zero-duty access on 98% of its tariff lines for Indian exports, covering major Indian sectors such as gems, jewellery, textiles, pharmaceuticals, and automobiles.
- Services market access: Indian companies are set to benefit from expanded market access in Oman’s services sectors, including IT, consulting, engineering, and professional services. These provisions are aimed at unlocking growth in sectors where India holds competitive advantages.
- Mobility frameworks: The CEPA includes liberalised mobility terms for Indian professionals, and now Indian companies operating in Oman can employ up to 50% of their workforce from India — dramatically higher than previous limits.
- Foreign direct investment (FDI) incentives: Indian firms gain clearer avenues for investment in strategic sectors like steel, energy, healthcare, and education — all areas with significant demand in both Oman and the broader GCC.
The Agreement is expected to catalyse a boom in bilateral trade, which already stood above $10 billion annually at the time of signing. For Indian exporters and investors, this represents not just tariff savings but institutionalised access to one of the Gulf’s most strategic economies.
Non-oil trade, infrastructure, and logistics: A complementary growth engine
For decades, Gulf trade was synonymous with oil. That’s no longer the case. Both the UAE and Oman are prioritising non-oil sectors — a trend that aligns directly with Indian industrial and services capabilities.
In Oman, policies have targeted logistics, manufacturing, tourism, and renewable energy. The Oman-Etihad Rail project, for instance, is designed to knit interior logistics corridors to ports and markets across the Gulf, enabling faster freight movement. [Context from supplied text]
Similarly, the UAE’s infrastructure — from world-class ports like Jebel Ali to global airports in Dubai and Abu Dhabi — provides gateway connectivity to Africa, Europe, and Asia. Indian businesses involved in manufacturing, trade, and distribution can therefore leverage these facilities to serve broader markets.
If Omani ports like Duqm and Salalah continue to grow as competitive transshipment alternatives with favourable cost structures, the entire region could become a hub for East-West and North-South trade — offering Indian exporters lower logistical costs and faster delivery times.
Renewable energy and the green economy: Convergence of visions
A particularly compelling area for Indian participation is the renewable energy sector, anchored on both UAE and Omani strategic ambitions.
The Gulf states are aggressively pursuing green energy to diversify their economies for a post-oil future. Major green hydrogen, solar, and wind projects — with investments sourced regionally and internationally — are underway. In both countries, green metals (like green steel production) and clean fuels (green hydrogen and ammonia) are emerging priority sectors. [Context from supplied text]
These sectors align well with Indian expertise in engineering, manufacturing, and scalable energy solutions — and the CEPA with Oman further enhances Indian firms’ ability to engage in these projects.
Banking, finance, and investment flows: Supporting commercial expansion
Financial ties between India and the UAE/Oman are strengthening as well. UAE banks have long maintained robust operations in India, while cross-border financing solutions continue to evolve. For Indian investors eyeing the Gulf, access to credit lines from UAE and Omani financial institutions — combined with Indian banking networks — opens doors to collaborative funding models.
Meanwhile, the Oman-India Joint Investment Fund, a 50:50 collaboration between the State Bank of India and Oman’s sovereign fund, exemplifies the circular investment flows tying both economies together.
Moreover, Indian enterprises in the UAE have access to global capital markets, venture financing, and sophisticated banking infrastructure — placing the UAE as a natural staging ground for scaling operations into Oman and beyond.
Indian business success stories: Case studies and momentum
While quantitative data on Indian companies in Oman remains incomplete in standard statistical releases, broader research indicates there are thousands of Indian firms and joint ventures operating across Oman — especially in free zones like Sohar and Salalah. Many of these firms are already active in energy, manufacturing, logistics, and services.
In the UAE, Indian entrepreneurs have been at the forefront of business growth for decades. From retail giants like the LuLu Group and diversified conglomerates to technology startups and logistics firms, Indian businesses have helped shape key sectors. According to business chamber data, Indian firms are now among the most active foreign business community in Dubai — with tens of thousands of active memberships and growing.
This success — rooted in adaptability, operational excellence, and strong diaspora networks — provides a clear template for expansion into Oman’s burgeoning opportunities.
Labour mobility and talent: A strategic advantage
A critical factor enhancing the UAE-Oman opportunity for Indian businesses is talent mobility. The CEPA’s provisions and bilateral understandings significantly ease the employment framework for Indian professionals — enabling Indian firms to deploy skilled workers without restrictive quotas and bureaucratic bottlenecks.
For labour-intensive sectors like construction, engineering, and services, this translates into operational flexibility. For high-skill sectors like technology, consulting, and renewable energy, it allows Indian firms to bring in their specialists directly, accelerating project delivery and ensuring quality.
This feature not only lowers operational risk but also enhances competitiveness for Indian companies entering or scaling in the Gulf markets.
Regulatory and policy support: Simplifying cross-border business
Beyond trade agreements, regulatory cooperation between the UAE and Oman has improved trade facilitation. Initiatives such as eliminating double VAT on UAE-Oman trade have removed a key administrative and cost barrier — boosting intra-GCC commerce and making the region more attractive for Indian exporters and importers alike.
Furthermore, both countries have implemented investor-friendly policies — including long-term visas, 100% foreign ownership in many sectors (especially in UAE free zones), and streamlined license processes. These reforms reduce entry costs and risks for Indian startups, SMEs, and large corporates.
Market potential and sectoral opportunities for Indian businesspersons
The combined UAE-Oman market offers a range of sectoral opportunities:
- Renewable energy & green technologies: With major green hydrogen, solar, and wind projects underway, Indian firms in engineering, project management, and tech can find significant contracts. [Supplied text context]
- Logistics and manufacturing: Seamless integration of rail and ports provides supply chain efficiencies for Indian manufacturing firms.
- Technology & digital services: Both countries are advancing digital infrastructure and smart city initiatives.
- Tourism and hospitality: Tourism flows — bolstered by cultural ties and diaspora travel — create openings for Indian hospitality brands and service providers.
- Healthcare and education: Rising demand in Oman and the UAE for quality healthcare and educational services presents niches for Indian providers.
With the CEPA in Oman and the UAE’s existing CEPA with India, Indian businesses now have preferential treatments across a wider spectrum of goods and services.
Challenges and strategic considerations
Despite the immense promise, Indian companies must navigate certain challenges:
- Cultural and regulatory adaptation: While Indian business practices are respected, local regulatory environments demand localised understanding.
- Competition: Gulf markets are increasingly attracting global players — from Europe, East Asia, and the U.S.
- Market volatility: Oil price fluctuations and geopolitical tensions in the Middle East can affect business sentiment.
However, the strategic positioning of the UAE and Oman — politically stable, economically diversified, and commercially open — positions them more resiliently than many alternative destinations.
A unified Gulf gateway for Indian commerce
The economic relationship between India, the UAE, and Oman is entering a new phase — one where Indian businesspersons are no longer peripheral participants but central contributors to regional growth and innovation. A combination of demographic presence, strategic trade agreements (especially the India-Oman CEPA), liberalised labour and investment policies, and shared visions for a green, diversified future has positioned the UAE cum Oman as a compelling, integrated business destination.
For Indian entrepreneurs, the message is clear: the Gulf is not simply a destination for exporting labour or remitting funds. Instead, it is a fertile ground for bilateral trade, joint ventures, cross-border services, and innovation-led growth. Whether in manufacturing, technology, logistics, energy, or professional services, Indian businesspersons now have access to a regional ecosystem poised for growth — one where proximity to India, strong diaspora networks, and preferential market access create an advantageous competitive edge.
The UAE and Oman together offer more than just markets — they offer a gateway to the world.
