India-UAE partnership is not only historical and based on age-old ties rooted in trade and commerce but is also a progressive one. The special ties enjoyed by these two countries have become stronger with time. In the last few years, the two sides have exchanged visits at the highest levels, highlighting the importance both countries attach to these relations.
Today, the India-UAE relationship is defined by their economic and commercial affiliations, and their strong political will to constantly elevate their status and work towards building a more robust and resilient partnership.
Established in 1952, India and UAE diplomatic relations are striving to further strengthen these ties for mutual benefits. Bilateral trade today is US$ 60 billion making UAE, India’s third largest trading partner after China and the US. Moreover, UAE is the second largest export destination of India (after US) with an amount of nearly US$ 25 billion for the FY 2021-2022 (April-Feb).
Indian exports have grown from US$ 17 billion to US$ 25 billion from FY 21 to FY22, while imports have also increased from US$ 26 billion to US$ 40 billion.
India’s exports to the UAE are quite varied. India’s major export items to the UAE include petroleum products, precious metals, stones, gems & jewellery, minerals, food Items, textiles and Engineering & Machinery Products and Chemicals. India’s major import items from the UAE are petroleum and petroleum products, precious metals, stones, gems & jewellery, minerals, chemicals, wood & wood products.
Acknowledging 50 years of strong bilateral ties, leaders from both nations agreed on strengthening India-UAE’s Comprehensive Strategic Partnership with opportunities for greater collaboration. India and UAE signed the historical Comprehensive Economic Partnership Agreement (CEPA), which came into effect on 1 May 2022. This will ensure that the two countries work together even more closely to address the shared global challenges, and promote the development of new trade, investment, and innovation dynamics, and intensify bilateral engagement in diverse areas. The CEPA will increase employment opportunities and will increase bilateral trade in goods to $100 billion in five years of the signed agreement and increase trade in services to $15 billion. It has brought on opportunities for many sectors, particularly labour-intensive ones such as textiles, gem and jewellery, pharmaceuticals, and agriculture,
The UAE’s investment in India is estimated to be around US$ 17-18 billion. UAE is the 9th biggest investor in India in terms of FDI. The UAE sovereign wealth funds invested over US$ 4.12 billion in India during FY 2020-21. UAE’s investments in India are concentrated mainly in five sectors: Services Sector (15.78%), Sea Transport (8.80%), Power (8.34%), Construction (Infrastructure) Activities (7.15%) and Construction Development: Townships, Housing, Built-Up Infrastructure and Construction-Development Projects (7.08%). There are a number of joint ventures and investments undertaken by UAE companies in India.
The National Investment and Infrastructure Fund (NIIF) signed a US$1 billion investment agreement with Abu Dhabi Investment Authority (ADIA) to invest in energy, transportation, and other infrastructure-related sectors in India.
Investments by Indian companies in UAE would be more than approximately US$85 billion. Many Indian companies have set up manufacturing units either as joint ventures or in Special Economic Zones for cement, building materials, textiles, engineering products, consumer electronics etc.
The relations between India and UAE are no longer single layered but have grown into a truly comprehensive bilateral growth story riding on the wave of consistency, commitment, and action. The holistic multi-stakeholder strategy and approach of the two governments deepens the understanding and appreciation of each other. As quoted by Shri Piyush Goyal, Minister of Commerce & Industry, Consumer Affairs & Food & Public Distribution and Textiles, Government of India. “The sky is the limit for our trade & economic ties as we commit to building a shared future & enhancing the prosperity of our people.” Both nations are entering a golden era of economic and trade cooperation with the signing of India-UAE CEPA. Looking forward, India and UAE aim to enhance partnerships in technology & innovation, entrepreneurship, and start-ups. There is a need to open up more opportunities for UAE investments in India in areas including infrastructure, shopping malls, retail, healthcare, education & technology, renewable energy, real estate, and housing, along with opportunities for Indian investments in UAE and promote UAE as the trading, manufacturing & logistics hub for the GCC, Africa and European markets.
Role of CII
To cement the India-UAE relationship further, CII established its office in the UAE in 2017 and has since played a key role in maintaining these bilateral relations and aim to provide opportunities for both emerging economies can collaborate and build new bridges to foster balanced and equitable growth. Aiming to provide a platform for dialogue, debate, deliberation and engagement, CII in collaboration with the Ministry of Commerce & Industry and Embassy of UAE to India, had organised this 1st edition of India UAE Economic Partnership Summit, immediately after CEPA was enforced, to capture ideas and perspectives on new opportunities of partnerships for reinvigorating trade and investment between both the countries. Under the theme “India UAE CEPA – Unleashing the Golden Era”, CII carried forward the agenda of strengthening partnerships between India and UAE.