Can Oman’s Sohar Port help India bypass the Strait of Hormuz?

West Asian shipping lanes continue to cast a long shadow as energy prices refuse to ease.

For India, a nation that relies on the Persian Gulf for over 60 per cent of its crude oil imports and substantial volumes of Liquefied Petroleum Gas (LPG) and Liquefied Natural Gas (LNG), any disruption in the Strait of Hormuz poses an immediate threat to economic stability and energy security.

In response to these vulnerabilities, New Delhi is increasingly turning its gaze toward the Sultanate of Oman.

Situated along the Gulf of Oman outside the precarious entrance of the Strait of Hormuz, Oman’s deep-water port network — anchored by the rapidly expanding SOHAR Port and Freezone — is being touted as an alternative.

While Sohar Port cannot entirely replace the sheer capacity of the Persian Gulf’s inner ports overnight, its unique placement, world-class industrial free zone, robust overland road connectivity to the Gulf Cooperation Council (GCC) states, and recent regulatory breakthroughs like the India-Oman Comprehensive Economic Partnership Agreement (CEPA) make it far more than just a backup plan.

Why does India need an alternative?

Measuring just 21 nautical miles wide at its narrowest point, the Strait of Hormuz forms the sole maritime exit for the Persian Gulf, connecting oil-rich nations such as Saudi Arabia, Kuwait, Qatar, Bahrain, Iraq, and the United Arab Emirates to the open waters of the Arabian Sea and Indian Ocean.

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For decades, the Strait of Hormuz has been recognised as the single most critical maritime bottleneck on Earth.

Beyond crude oil and gas, major Gulf commercial hubs — including Dubai’s Jebel Ali and Abu Dhabi’s Khalifa Port — are located inside the Persian Gulf, requiring container ships to navigate the strait back and forth to serve South Asian, East Asian, and European markets.

When regional conflicts escalate, naval skirmishes break out, or non-state actors threaten commercial shipping in the region, the Strait of Hormuz becomes a high-risk zone, as has been witnessed in the last few months.

Maritime insurance underwriters routinely impose prohibitive War Risk Surcharges on vessels passing through the strait, causing freight rates to skyrocket.

In severe crises, tanker traffic slows to a crawl, creating domino effects that stall Indian refineries, inflate domestic fuel prices, and delay critical manufactured exports.

For India, whose economic growth depends on uninterrupted raw material flows and energy security, relying solely on shipping lines that must transit Hormuz has long been a strategic hazard.

Why is Sohar Port unique?

This is where SOHAR Port and Freezone alters the equation. Located in northern Oman in the Al Batinah North Governorate, Sohar sits directly on the coastline of the Gulf of Oman.

Positioned safely outside the Strait of Hormuz, vessels navigating to Sohar sail directly across the Arabian Sea from Indian ports such as Jawaharlal Nehru Port Trust (JNPT/Nhava Sheva) in Mumbai or Mundra Port in Gujarat, reaching Omani shores without ever entering the narrow passage of Hormuz.

This positioning offers numerous operational advantages for Indian shipping lines and traders.

First, vessels navigating to Sohar avoid the high insurance premiums and operational risks associated with sailing into the Persian Gulf during periods of regional tension.

A ship sailing from Mumbai to Sohar remains in open, international waters throughout the voyage, significantly lowering operational costs and eliminating delays caused by naval checkpoints or maritime threats.

Second, Sohar is connected to an extensive, modern overland transportation network. High-capacity highway corridors link Sohar directly to the United Arab Emirates border — just over an hour away — and extend onward to Saudi Arabia, Qatar, and other GCC countries.

During times of Hormuz blockades or heightened risk, cargo can be unloaded at Sohar’s deep-water berths and trucked overland into upper Gulf markets, bypassing the naval passage entirely.

Third, Sohar’s deep-water capabilities enable it to host the largest commercial vessels afloat.

Managed as a 50:50 joint venture between the Sultanate of Oman and the Port of Rotterdam (under the Sohar Industrial Port Company), the port features deep-water jetties capable of accommodating Valemax-class Very Large Ore Carriers (VLOCs), mega-container ships, and ultra-large crude carriers.

Is India interested in Oman’s Sohar Port?

The strategic alignment between Oman’s port infrastructure and India’s economic ambitions was formally spotlighted in New Delhi during a two-day investment roadshow held on September 15-16 last week.

Organised by SOHAR Port and Freezone under Issa Saleh Al Shibani, Ambassador of the Sultanate of Oman to India, the roadshow brought together leading Indian industrialists, manufacturers, exporters, and executives.

Held under the theme “Your Gateway to International Markets,” the event was organised in collaboration with the Associated Chambers of Commerce and Industry of India (ASSOCHAM) at the Embassy of the Sultanate of Oman.

The sessions highlighted actionable pathways for Indian companies to establish manufacturing, assembly, and distribution bases within Sohar Freezone to access GCC, African, and European markets.

Speaking at the event, Saurabh Sanyal, Secretary General of ASSOCHAM, highlighted the expanding horizons of Indian enterprise, stating, “Indian businesses are increasingly looking beyond traditional markets to expand their global footprint, diversify supply chains and build stronger international partnerships. SOHAR Port and Freezone offers a platform for these ambitions…”

Addressing the delegation, Dr. Raid Al Rubaiey, CEO of SOHAR Freezone and deputy CEO of SOHAR Port, pointed to the existing foundation of Indian enterprise in the port ecosystem and outlined the potential for future synergy.

“India represents an important and growing dimension of SOHAR’s international investment landscape… There is significant potential to deepen this relationship through investments that complement our industrial clusters…”

With total investments exceeding USD 30 billion across the Port and Freezone and more than 72 million tonnes of cargo handled annually, SOHAR provides an established industrial and logistics platform connecting businesses to regional and global markets.

What role does the India-Oman CEPA play in this?

The timing of Sohar Port’s push into India could not be more opportune. On June 1 earlier this year, the landmark India-Oman Comprehensive Economic Partnership Agreement (CEPA) officially came into force.

Signed in December last year during Prime Minister Narendra Modi’s state visit to Muscat, the CEPA represents Oman’s first bilateral free trade agreement in nearly two decades (since its accord with the United States in 2006) and India’s second major trade agreement in the Gulf region following its deal with the UAE.

Under the provisions of the CEPA, Oman has eliminated import tariffs on 98.08 per cent of its tariff lines, granting immediate zero-duty access to approximately 99.4 per cent of Indian exports by value.

This sweeping tariff liberalisation removes the baseline 5 per cent import duty that previously applied to Indian manufactured goods, agricultural produce, machinery, and consumer products entering Oman.

Bilateral merchandise trade between India and Oman reached USD 11.18 billion in Fiscal Year 2025-26, rising from USD 10.61 billion in the previous year.

Indian exports to Oman accounted for over USD 4 billion, while imports from Oman — dominated by mineral fuels, fertilisers, and organic chemicals — stood at USD 7.16 billion.

Key Indian export sectors benefiting from the CEPA include:

By pairing the zero-tariff benefits of the CEPA with the logistics capabilities of Sohar Port, Indian companies can manufacture or process goods inside Sohar Freezone, add value, and re-export them duty-free across the entire Gulf region.

What does Sohar offer Indian investors?

Spanning over 4,500 hectares, the SOHAR Port and Freezone complex is designed around four specialised industrial clusters. These clusters provide plug-and-play infrastructure for Indian companies seeking an overseas manufacturing base outside the Strait of Hormuz.

1. The logistics & supply chain cluster

Anchored by global terminal operators, including C Steinweg Oman for break-bulk, dry bulk, and container handling, Sohar’s logistics hub serves as a central warehousing and re-export engine.

Indian logistics majors and freight forwarders are leveraging Sohar as a transshipment hub, holding inventory on Omani soil and dispatching goods via feeder vessels or trucks based on real-time regional demand.

2. The metals & mining cluster

Sohar hosts one of the region’s largest metals hubs, featuring major steel mills, aluminium smelters, and ferrochrome processing facilities.

Sohar is also home to the world’s second-largest rare earth metal manufacturing facility outside China, producing antimony metal and trioxide — essential components for flame retardants, electronics, and advanced manufacturing.

Indian automotive component makers and machinery manufacturers find strong supply chain synergies within this cluster.

3. The petrochemicals & energy cluster

Integrating refining capacity with downstream chemical production, Sohar produces polymers, aromatics, and industrial chemicals.

Indian plastic processing companies and chemical manufacturers can utilise Sohar’s feedstock to manufacture high-value exported goods with 100 per cent foreign ownership and zero corporate income tax guarantees inside the free zone.

4. The food and agro-logistics cluster

Sohar houses Oman’s national strategic grain reserves, flour mills, sugar refineries, and specialised bulk food handling jetties.

Given India’s role as a major exporter of rice, cereals, sugar, and agricultural commodities, Indian food processing companies are establishing processing and packaging units inside Sohar to serve the GCC and East Africa.

Can Sohar fully replace the Strait of Hormuz?

The Persian Gulf ports located inside Hormuz — such as Dubai’s Jebel Ali, Saudi Arabia’s King Abdulaziz Port in Dammam, and Kuwait’s Shuwaikh Port — collectively handle hundreds of millions of tonnes of containerised cargo and crude oil exports every year.

Sohar Port, with its annual handling volume of 72 million tonnes, does not possess the physical berth capacity to absorb 100 per cent of the traffic destined for the entire Persian Gulf if Hormuz were to close completely.

However, as a strategic bypass, Sohar plays an indispensable role during crises. When large international mother vessels avoid entering the Persian Gulf due to war risks or military conflict, they can drop off container cargo at Sohar.

From Sohar, smaller feeder ships or overland trucking fleets transport the goods to final destinations across the GCC. During recent spikes in Gulf tensions, short-sea feeder traffic between Indian west coast ports (Nhava Sheva, Mundra) and Sohar increased four-fold as shippers sought to minimise exposure to Hormuz.

Goods landed at Sohar can also reach Dubai, Abu Dhabi, Riyadh, or Muscat via modern four-lane highways within hours.

Saudi Arabia, for instance, utilises its cross-country East-West Crude Oil Pipeline (Petroline) to transport crude oil from its eastern fields to the Red Sea port of Yanbu, bypassing Hormuz entirely.

Even crude oil and petroleum products are being routed to Omani waters off Sohar for Ship-to-Ship (STS) transfer onto supertankers bound for Asian markets, including India.

Oman has long been India’s oldest strategic partner in the Arabian Peninsula, bound by defence cooperation agreements, joint naval exercises (Naseem Al Bahr), and shared maritime security interests.

By anchoring its regional trade strategy in Omani ports — including Sohar in the north, Duqm in the central coast, and Salalah in the south — India can build a resilient, multi-node logistics network outside maritime chokepoints.

Duqm Port, where India has negotiated logistics access for the Indian Navy, complements Sohar’s commercial power by providing naval support capabilities and crude storage facilities.

Sohar also fits seamlessly into emerging transnational connectivity initiatives, such as the India-Middle East-Europe Economic Corridor (IMEC) and the International North-South Transport Corridor (INSTC).

With inputs from agencies