India and the United Arab Emirates (UAE) have set an ambitious target to increase their non-oil bilateral trade from the current USD 48 billion to USD 100 billion by 2030. The decision was reached during the first meeting of the Joint Committee of India-UAE Comprehensive Economic Partnership Agreement (CEPA). Both countries aim to double their non-petroleum trade in the next seven years, emphasizing the need to enhance trade cooperation beyond the oil sector.
Strengthening Economic Ties:
The Joint Committee of India-UAE CEPA agreed to establish various committees, sub-committees, and technical councils to effectively implement the provisions of the trade agreement. These bodies will focus on key areas such as trade in goods, customs facilitation, rules of origin, sanitary and phytosanitary measures, trade remedies, investment facilitation, and economic cooperation.
Enhancing Trade in Services:
To promote trade in services, a new sub-committee will be formed to handle matters related to this sector. Both countries have also decided to exchange services trade data on a quarterly basis. This initiative aims to boost collaboration and expand opportunities in areas such as MSMEs, startups, women entrepreneurs, and the services sector.
India-UAE CEPA Council:
The establishment of the India-UAE CEPA Council will serve as a platform for both governments and export-oriented private sectors to facilitate the implementation of CEPA. This council will create awareness, build partnerships, and organize business events in India and the UAE. It will also focus on supporting MSMEs, startups, women entrepreneurs, and participants in the services sector.
Collaboration in the Petroleum Sector:
While diversifying their trade relationship, India and the UAE emphasized the importance of the petroleum sector. India, being a significant importer of petroleum products, requested the UAE to encourage their companies to source more refined products from India. The UAE, as a large consumer of refined products, also expressed interest in expanding trade in this area.
Investments and Growth Opportunities:
The UAE’s Abu Dhabi Investment Authority (ADIA) is set to establish a presence in India’s GIFT city, which will further accelerate inward investments into India. Investors from the UAE are keen to explore opportunities in sectors such as energy, emerging technologies, skills and education, food, healthcare, defense, and startups. This reflects the growing interest in India’s robust investment climate.
Positive Impact of CEPA:
The CEPA between India and the UAE has already started yielding positive results. In the first 12 months since its implementation, bilateral non-oil trade witnessed a 5.8% increase, reaching USD 50.5 billion. Despite the global decline in trade during Q3 and Q4 of 2022, the India-UAE partnership demonstrated resilience and contributed to economic growth. In the first quarter of the current year, total bilateral trade reached USD 13.2 billion, representing a 16.3% increase compared to the previous quarter.