India, UAE discuss prospects for further investment opportunities

The 12th Meeting of the India-UAE High Level Joint Task Force on Investments (HLJTFI) took place in Mumbai, Co-Chaired by Shri Piyush Goyal, Minister of Commerce and Industry, Government of India, and Sheikh Hamed Bin Zayed Al Nahyan, Managing Director of the Abu Dhabi Investment Authority (ADIA).

The HLJTFI was established in 2013 to promote trade, investment and economic ties between India and the UAE. Since its formation, it has provided an effective mechanism to discuss opportunities and prospects for further investments in India and the UAE, while acting as a forum to resolve issues faced by investors of the two countries.

During the 12th HLJTFI meeting, the Co-Chairs acknowledged the continued growth and strengthening of the bilateral relationship between India and the UAE, including on trade and investment related matters.

The India-UAE Bilateral Investment Treaty, signed during Prime Minister Modi’s visit to the UAE in February 2024, has been ratified by both sides and entered into force with effect from 31st August 2024.

The Co-Chairs also acknowledged the rapid rise in bilateral trade under the Comprehensive Economic Partnership Agreement (CEPA), which came into force in May 2022. The India-UAE CEPA was a landmark agreement designed to stimulate increased trade and boost the trading relationship between the two countries.

During the course of the last two years, the CEPA has helped reduce tariffs on the majority of product lines, sought to address other barriers to trade and created new avenues for cooperation.

As a result of the deal, bilateral trade has risen consistently, with non-oil trade rising to $28.2 billion in the first half of 2024, a 9.8 per cent year-on-year increase. The agreement has also spurred FDI: as of 2023 the UAE is India’s fourth-largest foreign investor with US$3.35 billion committed across a wide range of sectors, representing a threefold increase on 2022.

Indian FDI into the UAE in 2023 totalled $2.05 billion, more than 2021 and 2022 combined. These figures represent real growth with real, on-the-ground impact.

Considering the strategic agreements and initiatives signed during the recent official visit of His Highness Sheikh Khalid bin Mohamed Al Nahyan, Crown Prince of Abu Dhabi, to India, the two sides noted the existing and future investments and projects of UAE entities in key sectors of the Indian economy, including energy, artificial intelligence, logistics, food and agriculture, which total approximately $100 billion.

The meeting also reviewed UAE investments in Indian infrastructure assets.

During the HLJTFI meeting, the two sides reviewed progress on several key initiatives, including some that were previously announced by Indian Prime Minister Narendra Modi and UAE President His Highness Sheikh Mohamed Bin Zayed Al Nahyan, and expressed satisfaction at the rapid pace of implementation.

These initiatives include bilateral trade in local currencies, the integration of payment systems of India and the UAE, cooperation on Central Bank Digital Currencies, the launch of work relating to a Virtual Trade Corridor and the development of a food park in Ahmedabad. The strong progress made on these initiatives attests to the high level of commitment from both sides to ensure the implementation of their respective leaders’ visions.

The two sides welcomed the announcement of the Abu Dhabi Investment Authority (ADIA) establishing a subsidiary at GIFT City. This underlines the strong interest from UAE’s institutional investors in India’s growing and dynamic economy, and GIFT City’s reputation as world-class financial services centre, operating under a strong regulator and a robust legal framework. The HLJTFI provides a forum to deliberate on ways and incentives for encouraging further growth in investment flows from both sides. In this context, the Indian side shared opportunities for investments in priority sectors like renewable energy, green hydrogen, pharmaceuticals and genomics, among others. The UAE side also raised opportunities for investment in India’s aerospace sector, due to the rapid growth of its aviation market.

Issues related to investments from both sides, as well as specific challenges faced by companies from both countries, were also discussed during the meeting, with a view to removing obstacles and facilitating their resolution. The Co-Chairs directed both teams to work together and with the relevant government entities to address these issues in a timely and mutually acceptable manner.

The HLJTFI meeting was attended by Shri Amardeep Singh Bhatia, Secretary, Department for Promotion of Industry and Internal Trade, Government of India, Shri Sunjay Sudhir, Ambassador of India to the UAE, Dr. Abdulnasser Jamal Alshaali, Ambassador of the UAE to India, and a number of senior officials from both the governments.

WAM