India and UAE celebrate two years of free trade agreement with 16% growth

• Bilateral trade between India and the UAE has increased by 16% since signing a trade and investment pact in February 2022.
• The growth has been primarily in energy, infrastructure, technology, pharma and healthcare, tourism, and cultural exchanges.
• The UAE-India CEPA Council was established to enhance investment, trade ties, and implement the pact’s rules.

India and the UAE have witnessed a 16 percent boost in bilateral trade over the past two years since signing a broad trade and investment pact. Growth has been particularly notable in the innovation, energy, and technology sectors, according to India’s top business body. The Comprehensive Economic Partnership Agreement, signed by India’s Commerce and Industry Minister Piyush Goyal, and UAE Economy Minister Abdulla bin Touq Al-Marri in February 2022, has facilitated this increase.

In effect since May 1, 2022, the pact has reduced tariffs on about 80 percent of all goods and granted zero-duty access to 90 percent of Indian exports. According to data from the Federation of Indian Chambers of Commerce and Industry (FICCI), India’s largest and oldest trade association, bilateral exchanges have significantly advanced, registering a year-on-year increase of more than 16 percent.

“In the first two years of CEPA’s operation, trade between the two countries has grown remarkably by 16.41 percent, showing an increase of total trade from $72.87 billion in 2021-2022 to $84.84 billion in 2022-2023,” FICCI Secretary-General S.K. Pathak told the news.

“Most of this growth has been registered in energy, infrastructure and construction, technology and innovation, pharma and healthcare, tourism and cultural exchanges.”

The agreement has positioned the UAE as India’s key partner in the Gulf Cooperation Council region, with both countries expecting to increase the total value of bilateral trade in non-petroleum products to over $100 billion and trade in services to $15 billion by 2030.

Citing the “growing importance of the trade relations between the two countries,” Pathak said the FICCI had “set up an office in Dubai to work closely with industry and government and support business to achieve the full benefits of CEPA.”

With support from the UAE and Indian governments, the UAE-India CEPA Council was also established earlier this year to enhance investment, trade ties, and the implementation of the pact’s rules. Members of the business community in Mumbai, India’s financial hub, joined the UAE Embassy in India in celebrating the second anniversary of the agreement. UAE Ambassador Abdulnasser Al-Shaali welcomed the growth in bilateral commercial exchanges as a “resounding success story,” solidifying the long-standing economic ties between the two countries.

“Over the past two years, we have witnessed remarkable growth in bilateral trade, a testament to the immense potential that exists when our complementary strengths are harnessed effectively,” he said during the event on Wednesday.

“The CEPA has not only opened new avenues for businesses to benefit from the bilateral partnership but has also fostered deeper integration of our economies, paving the way for increased investment flows and collaboration across diverse sectors.”

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