Three Years of India-UAE CEPA: A Milestone in Economic and Strategic Cooperation

Over the years, India and the United Arab Emirates (UAE) have been consistent partners in trade and commerce, acting as significant builders of the global commerce ecosystem. Beyond bilateral commerce, their strategic economic relationships have an impact on regional and international supply networks. The UAE acts as a gateway for Indian companies to access global markets, given that it is a hub that connects Asia, the Middle East, and Africa [1]. With its sizable manufacturing and service sectors, India offers a vital platform for economic diversification and innovation. The commitment of both countries to promoting economic growth, technical cooperation, and investment opportunities is demonstrated by the Comprehensive Economic Partnership Agreement (CEPA) between India and the UAE [1]. CEPA's accomplishments over the past three years demonstrate how bilateral collaborations may promote equitable and sustainable global trade.

The CEPA marks its third anniversary on February 18, 2025. The bilateral agreement was signed in 2022 during a virtual summit between India’s Prime Minister Shri Narendra Modi and UAE President His Highness Sheikh Mohamed bin Zayed Al Nahyan. It has greatly strengthened bilateral trade and economic relations. CEPA came into effect on May 1, 2022. It has eased outstanding growth in trade and economic diversification, along with cross-border investment opportunities. After the signing of CEPA, bilateral merchandise trade between India and the UAE has nearly doubled, rising from USD 43.3 billion in FY 2020-21 to USD 83.7 billion in FY 2023-24 [2]. This corresponds with the eventual aim of raising mutual non-petroleum commerce up to USD 100 billion by 2030 [2].

CEPA has resulted in helpful tariff advantages that have lessened overall exports worth USD 19.87 billion to the UAE. Non-oil exports in FY 2023-24 totaled almost USD 27.4 billion, a 25.6% average increase [2]. The trade basket now includes refined crude oil products, gems and jewelry, electrical machinery, organic and inorganic chemicals, and high-technology goods such as generators and reactors. Smartphones have emerged as a major export item, with shipments worth USD 2.57 billion in FY 2023-24 [2].

Strengthening Institutional Frameworks

India and the UAE have been proactive in addressing the challenges faced by exporters and businesses under CEPA. Regular high-level meetings and technical discussions have facilitated the resolution of existing trade issues. Additionally, the Trade in Goods Committee and various sub-committees have been operationalized and designed to address trade in services, rules of origin, customs procedures, and trade facilitation.

The inauguration of the Bharat Mart initiative in Dubai by Prime Minister Modi is a significant exemplifier of CEPA’s impact. This project serves as a one-stop platform for Indian manufacturers to access global markets, enhancing the ease of doing business and fostering Indian exports [3].

More than a Bilateral Agreement: A Strategic Global Model

Apart from its economic benefits, CEPA represents a strategic partnership that goes beyond India and the UAE, serving as a model for economic diplomacy. The agreement empowers India’s global trade position by reinforcing supply chain resilience and diversifying export destinations. It also boosts and promotes science, technology, and innovation, aligning with India’s ambition to become a global leader in research and development.

Focusing on high-tech sectors such as artificial intelligence, space technology, and clean energy under CEPA has positioned India and the UAE as strategic collaborators in global innovation. The agreement spurs investment in cutting-edge industries, ensuring that both nations remain competitive in the evolving international economic landscape. In an era where trade agreements shape geopolitical alignments, CEPA underlines India's commitment to capitalizing on trade as a tool for global engagement and strategic influence [4].

A New Realm of Economic Partnership

The India-UAE CEPA has introduced a new era of economic and strategic diplomacy by strengthening small and medium enterprises (SMEs), generating employment, and creating new business opportunities. The agreement represents a shared vision for sustainable economic growth and a long-term commitment to mutual prosperity. As both nations work towards strengthening their economic ties, CEPA remains a foundation of their partnership by creating a bedrock for regional and global trade agreements.

The three years of CEPA marks the success of its existence and is set to reach new heights, delving for deeper economic integration and reinforcing India and the UAE’s positions as key players in the global trade ecosystem.

References

[1] "India and the UAE: Shaping a New Global Order," Global Order, [Online]. Available: https://www.globalorder.live/post/india-and-the-uae-shaping-a-new-global-order.

[2] Press Information Bureau (PIB), "India-UAE CEPA Achievements," [Online]. Available: https://pib.gov.in/pressreleasepage.aspx?PRID=2104450.

[3] Economic Times, "Bharat Mart: All You Need to Know About India’s Big Middle Eastern Trade Push," [Online]. Available: https://economictimes.indiatimes.com/news/economy/foreign-trade/bharat-mart-all-you-need-to-know-about-indias-big-middle-eastern-trade-push/articleshow/107684329.cms?from=mdr.

[4] Hindustan Times, "Why the UAE-India Relationship is More Than Just Bilateral Economic Ties," [Online]. Available: https://www.hindustantimes.com/opinion/why-the-uae-india-relationship-is-more-than-just-bilateral-economic-ties-101734276498943.html.