UAE-India Trade Growth: A Detailed Overview

Bilateral Trade Surge

In Vijayawada, on Thursday, Abdulnasser Alshaali, the Ambassador of the United Arab Emirates to India, revealed significant trade growth between the UAE and India. For the fiscal year 2023-24, bilateral trade increased by an impressive 15%, reaching USD 83.6 billion. This surge is attributed to the Comprehensive Economic Partnership Agreement (CEPA) signed in May 2022. This strategic deal has played a crucial role in boosting trade volumes by simplifying trade processes, reducing tariffs, and creating more efficient pathways for businesses to operate across borders.

Significant Impact of the Comprehensive Economic Partnership Agreement (CEPA)

Ambassador Alshaali emphasized the transformative impact of the CEPA on bilateral trade. He highlighted that the agreement’s positive effects are evident in the significant rise in trade between the UAE and India. The CEPA has been instrumental in facilitating smoother trade interactions and fostering stronger economic ties. This agreement not only reflects the benefits of strategic partnerships but also sets the stage for continued growth in the UAE-India economic relationship.

Future Trade Targets and Ambitions

Looking ahead, the UAE has set an ambitious goal to achieve USD 100 billion worth of non-oil bilateral trade with India by the year 2030. This target demonstrates the UAE’s commitment to deepening economic cooperation with India and expanding trade opportunities. The goal underscores the importance of the CEPA in shaping future economic interactions and ensuring sustained growth in bilateral trade.

Growth in Indian Exports to the UAE

The CEPA has significantly boosted Indian exports to the UAE. Notably, exports of gems and jewellery, pharmaceuticals, and fruits and vegetables have shown remarkable growth. Gems and jewellery exports surged by 64%, pharmaceuticals by 39%, and fruits and vegetables by 35%. This increase in exports reflects the heightened demand for Indian products in the UAE market and highlights the effectiveness of the CEPA in promoting trade.

Ongoing Enhancements in Trade Relations

The CEPA is considered a crucial milestone, but it is seen as only the beginning of deeper economic integration. The UAE plans to further enhance trade relations by eliminating tariffs on a total of 7,581 Indian products in the near future. This move will cover 99% of India’s exports to the UAE in terms of value. Currently, tariffs have already been removed for over 80% of India’s total exports, facilitating smoother and more cost-effective trade.

Support for Indian Startups and SMEs

Indian startups and small to medium-sized enterprises (SMEs) are also reaping the benefits of the CEPA. The improved trade environment has provided these businesses with better access to new markets. This enhanced accessibility is expected to foster innovation and growth among Indian SMEs, contributing to a more dynamic and competitive business landscape.

UAE Companies Expanding into the Indian Market

Several UAE companies are leveraging the CEPA to enter the Indian market, particularly in sectors such as construction, energy, and retail. This expansion highlights the growing opportunities for collaboration between the two countries and underscores the CEPA’s role in facilitating international business ventures. Companies like Emaar, DP World, Tabreed, and Aramex are actively engaging in the Indian market, seeking new growth avenues and partnerships.

Economic and Investment Roundtable in Vijayawada

On Thursday, Ambassador Alshaali participated in the UAE-Andhra Pradesh Economic and Investment Roundtable held in Vijayawada. The event featured discussions with state Industries Minister TG Bharat and representatives from over 10 UAE companies. This roundtable provided a platform for exploring investment opportunities and strengthening economic ties between the UAE and the Indian state of Andhra Pradesh.

Support for Indian Aviation Sector

The UAE’s interest extends beyond trade and investment to include support for the Indian aviation sector. Ambassador Alshaali emphasized that the UAE aims to partner with India in its aviation sector rather than compete. Emirates, the UAE’s flagship carrier, is the largest airline in the Middle East and has a substantial global presence. The UAE’s support for India’s aviation sector aims to enhance growth and development in this critical area.

Potential for Increased Passenger Volumes

Alshaali noted that India’s airports have the capacity to accommodate more passengers than current volumes. This potential for increased passenger traffic reflects the growing connectivity between the two countries. Additionally, integrating the Indian rupee into bilateral trade is anticipated to take time due to the complexities involved in technical and systemic adjustments.

The UAE remains committed to enhancing its economic and trade relations with India through initiatives like the CEPA. The agreement’s success in boosting trade, supporting startups, and facilitating market access underscores the potential for continued growth. As both nations work together, they are paving the way for a robust and prosperous economic partnership.