UAE Ambassador Alshaali reports a 16% year-on-year growth in trade between the UAE and India

UAE-India CEPA Marks Second Anniversary with Record Trade Surge

The alliance between the United Arab Emirates (UAE) and India is at its pinnacle, underpinned by the robust Comprehensive Economic Partnership Agreement (CEPA). This week commemorates the second anniversary of the CEPA’s enactment, a milestone that has significantly enhanced bilateral trade and investment. The agreement has achieved this by reducing tariffs, facilitating smoother cross-border trade, widening market access for services, establishing dispute resolution mechanisms, and safeguarding intellectual property rights.

The tangible outcomes are undeniable. Bilateral trade has surged to unprecedented levels, escalating from $72.9 billion to $84.5 billion between the fiscal years 2021-2022 and 2022-2023, marking an impressive nearly 16 per cent year-on-year growth. Moreover, the UAE has solidified its position as India’s fourth-largest foreign investor, with $3.3 billion in Foreign Direct Investment (FDI) inflows during the fiscal year 2022-2023. This remarkable progress underscores the shared commitment of both nations to leverage economic integration for mutual prosperity.

In a testament to this success, the two countries have further elevated their partnership by establishing the UAE-India CEPA Council (UICC) this year. Comprising government officials and private sector leaders from both sides, the UICC aims to explore new avenues for collaboration and ensure the continued effectiveness of the agreement. Already, the council’s efforts have borne fruit, with numerous Indian enterprises engaging with key stakeholders from the UAE to address business challenges and establish a foothold, capitalizing on our strategic positioning as a global hub.

The UICC serves as a pivotal catalyst in fostering closer ties and reinforcing the partnership between the two nations. Looking ahead, the potential of the UAE-India economic collaboration remains vast. Both nations are steadfast in their commitment to harnessing innovation, sustainable development, and advanced technologies to propel future growth. Promising sectors such as renewable energy, agri-tech, and digital services will be pivotal focuses under the CEPA framework.

The agreement’s facilitation of cross-border operations has significantly boosted trade, evidenced by initiatives such as the India-UAE rupee-dirham direct trade agreement and the inception of Bharat Mart. The latter, a flagship project conceived under the CEPA, is poised to become a prominent distribution center for Indian enterprises in Dubai. Leveraging the UAE’s strategic location and top-tier logistics infrastructure, Bharat Mart empowers Indian firms to access new markets and expand their global presence. Similarly, the India-UAE rupee-dirham direct trade agreement has streamlined transactions, bolstering India’s export capabilities.

The transformative collaboration fostered by the CEPA is evident across sectors such as food and renewable energy, where ambitious projects are already underway. During His Highness Sheikh Mohamed bin Zayed Al Nahyan’s visit to Gujarat, several Memoranda of Understanding (MoUs) spanning various sectors were exchanged between the UAE and India, underscoring their shared commitment to collaboration and ambitious goals.

Of particular note is the MoU on food park development, emphasizing the significance of the India-UAE food park project in enhancing food security and promoting trade in food and agriculture. Additionally, the MoU on investment cooperation in the renewable energy sector highlights the potential for joint efforts in implementing renewable energy projects. Earlier this year, the two nations unveiled a landmark agreement to establish a large-scale green hydrogen plant in the Emirates—a venture that will leverage Indian expertise in renewable energy technologies and the UAE’s exceptional infrastructure and natural resources.

The impact of the UAE-India CEPA transcends the economic domain, fostering an environment conducive to cultural exchange and social integration. By promoting transparent competition and facilitating cross-border transactions, the agreement strengthens people-to-people connections, reflecting the UAE’s commitment to pluralism and India’s cultural diversity.

Cultural and social integration serves as a cornerstone of this robust partnership, fostering synergies where diverse communities thrive. The UAE’s inclusive environment resonates with India’s tradition of embracing diversity, facilitating seamless experiences for Indians in the UAE. This mutual embrace of pluralism defines the UAE-India relationship, fostering an atmosphere conducive to innovation, entrepreneurial vigor, and collective prosperity.

The success of the UAE-India CEPA underscores the depth of their strategic relationship and the transformative power of economic integration. Looking ahead, as both nations unlock the full potential of the agreement, they set a global standard for collaborative, integrated, and sustainable growth.

In the years ahead, the UAE-India partnership will continue to flourish, strengthening economic ties while deepening cultural, diplomatic, and people-to-people connections. Together, they will usher in a new era of progress, innovation, and global influence, benefiting not only their own nations but the entire world.