India and Oman have agreed to eliminate import duties on gems and jewelry under the India‑Oman Comprehensive Economic Partnership Agreement (CEPA), a move that could lift annual Indian shipments to Oman from $35m today to an estimated $150m within three years.
- Price: Current annual exports $35M → projected $150M
- Carat Weight: Mixed wholesale lots (assorted carats and cuts)
- Origin: India (manufacturing hubs: Surat, Mumbai, Jaipur)
- Date: Agreement signed Dec 2025; likely implementation March 2026
Quiet trade shift with measurable financial impact
The CEPA, signed in December 2025, removes the standard 5% customs levy Oman applied to most imports, including gems and jewelry from India. For manufacturers and exporters in India the change is a straightforward margin adjustment — a reduction in landed cost that translates to sharper wholesale pricing and the potential for a fourfold increase in bilateral trade value over the next three years, according to the Gems & Jewellery Export Promotion Council (GJEPC).
Context: 2025 market currents shaping the outcome
The duty abolition arrives at a moment of several converging 2025 trends: heightened demand in Gulf wealth markets for ethically sourced pieces, growing acceptance of lab‑grown diamonds as a price‑efficient option, and a retail preference for sculptural, design‑forward jewelry where material cost competes with craft. Indian producers — with supply chains that already offer traceability tools and economies of scale — are positioned to supply both mined and lab‑grown product with a refined, vitreous luster and substantial heft that meet Gulf taste profiles.
Zero duty also reduces the friction for re‑export and regional wholesale distribution from Muscat into neighboring UAE markets, where markup strategies and duty regimes differ. For Oman, preferential access to Indian industrial inputs secures petrochemical and metal imports; for India, it deepens access to a compact, oil‑wealth population of roughly five million.
Impact: What this means for US retailers and investors
For US retailers the change is both supply‑chain and margin relevant. Expect three practical outcomes:
- Enhanced sourcing flexibility — Gulf wholesalers can price Indian lots more competitively, improving buying power for US importers who source via regional distribution hubs.
- Margin arbitrage on curated assortments — lower import costs in Oman enable selective pricing strategies for lab‑grown and artisanal lines where material savings can be reallocated to design and finish.
- Traceability and compliance implications — buyers must verify chain‑of‑custody and country‑of‑origin documentation as firms reconfigure routes to exploit duty differentials and to meet US disclosure and ESG expectations.
Investors should note the modest scale and high velocity of change: the market uplift is significant relative to current volumes but still small in absolute terms for single retailers. The opportunity favors mid‑to‑large wholesalers and vertically integrated firms that can absorb larger assortments, deploy rapid logistics, and capitalize on margin compression to fund higher‑margin design upgrades.
Implementation timing (likely March 2026) creates a planning runway for US buyers to renegotiate sourcing terms, pilot direct purchases from Indian exporters routed through Oman, or expand lab‑grown assortments that benefit most from duty elimination. The practical test will be how quickly Indian manufacturers convert price advantage into consistent, traceable supply that meets Gulf preferences for cut, polish and finish.
Photo: Muscat, Oman.
Image Referance: https://www.idexonline.com/FullArticle?Id=50988