CEPA fuels prosperity, sustainable economic growth for UAE and India

The economic, trade, and investment cooperation between the UAE and India represents a model for constructive international collaboration to stimulate bilateral investments and trade. This was culminated in the Comprehensive Economic Partnership Agreement (CEPA) between the two countries, contributing to creating more opportunities for sustainable mutual growth in their economies.

This comprehensive economic partnership reflects the strength of bilateral relations across all sectors, particularly in economic ties that have witnessed continuous development based on shared visions and strategies aimed at expanding into new vital sectors. These sectors support sustainable growth and competitiveness, aligning with the wise leadership’s directives in both countries.

CEPA between the UAE and India, signed on 18th February 2022, stands as the first bilateral agreement within the country’s global economic agreements programme, aimed at expanding the state’s network of trading partners with strategically important regional and global markets on the world trade map. It was also India’s first of its kind with a country in the Middle East and North Africa region. The agreement is expected to boost non-oil bilateral trade to reach $100 billion annually by 2030.

The economic cooperation between the UAE and India is witnessing continuous momentum across various sectors such as circular economy, tourism, aviation, entrepreneurship, small and medium-sized enterprises, renewable energy, technology, digital transformation, and transportation. This is all within the framework of their economic partnership and the potential both countries hold, aiming to strengthen cooperation in mutually interesting areas. This has contributed to stimulating economic growth for both nations, creating new promising opportunities for Emirati and Indian business communities.

Both the UAE and India have adopted several joint initiatives and action plans to support the expansion of new economic sectors in their markets, boosting the growth of Emirati and Indian startups, and providing them with more advantages and incentives. This ensures an increased contribution to the Gross Domestic Product (GDP) growth of both countries.

India is among the top five markets for tourism to the UAE. The UAE welcomed more than 3.1 million Indian tourists in 2022, marking an increase of 900,000 visitors compared to 2021. Additionally, the air traffic between the two countries witnesses over 1,800 flights monthly via UAE’s national carriers, continuing the shared growth trajectory between the two friendly nations. The implementation of the agreement has reflected an increase in non-oil trade flow between the countries, reaching Dhs91 billion during the first half of 2023.

The historic agreement embodies both countries’ commitment to openness and economic integration, contributing to improving the access of service exports to markets and facilitating investment flows into vital sectors, providing a platform for small and medium-sized enterprises to collaborate and expand.

The UAE-India partnership ensures the capability of both countries to benefit from the global economic landscape, especially Asia’s pivotal role. According to the International Monetary Fund, the Asia-Pacific region is expected to lead global growth this year, with an anticipated increase in GDP by 4.6 percent. Southeast Asia and South Asia (excluding China) are also set to lead the world in export and import growth over the next five years.

The UAE hosts over 83,000 Indian companies operating across diverse sectors, while India witnesses a continuous increase in the number of Emirati companies active in various strategic sectors. The aim for the upcoming phase is to increase the number of companies in both markets, particularly those focusing on emerging economic sectors, contributing to providing thousands of sustainable jobs and supporting comprehensive development efforts.

Moreover, the UAE’s joining of the “BRICS” alliance, of which India is a founding member, coupled with the country’s pivotal position in the economic corridor between India, the Middle East, and Europe - where Abu Dhabi played a significant role in its inception - will contribute to shaping a new vision for bilateral cooperation, aligned with the substantial momentum and expected economic opportunities. These developments are poised to positively impact the GDP growth of both countries.

The UAE and India continue to enhance cooperation under the CEPA, providing various advantages and incentives for business communities to continue growing, prospering, and forging new pathways of partnership, especially in sectors like health technology, agriculture, education, climate, and other emerging economic sectors.

In support of global efforts to tackle climate change, a transition to clean energy is a priority for India. The country aims to achieve net-zero emissions by 2070 and meet 50 percent of its electricity requirements from renewable energy sources by 2030. As a result, there are plans to increase India’s renewable energy capacity to 500 gigawatts, reduce the emissions intensity of its economy by 45 percent and reduce one billion tons of carbon dioxide. The Indian government estimates that the country’s shift onto a low-carbon path will require more than USD 10 trillion of new investments by 2070.

WAM