India–UAE CEPA: $200 Billion Trade Target and Strategic Economic Corridor

The India–UAE Comprehensive Economic Partnership Agreement (CEPA), signed in 2022, aimed to reach $100 billion in bilateral trade by 2030.

• This milestone was achieved five years ahead of schedule. Both nations have now set a new target to reach $200 billion in trade by 2032.

Scale and Economic Expansion

• Beyond Oil: Non-oil trade grew by 20% last year, reaching $65 billion and encompassing sectors like agriculture, gems and jewellery, textiles, and machinery.
• Diaspora Linkages: Approximately 5 million (50 lakh) Indians live and work in the UAE, making it the country’s largest diaspora community and its “human backbone”.
• Connectivity: There are 1,200 flights per week between the two nations, making it one of the busiest air routes in the world and facilitating both business and people-to-people ties.

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The “Two-Way Street” of Investment

• Investment Flows: UAE investments in India have exceeded $22 billion since 2000, while Indian investments in the UAE have crossed $16 billion.
• Indian Investment in UAE:
  • Low-Carbon Chemicals Expansion: Reliance Industries has invested $2 billion in Abu Dhabi to expand its low-carbon chemicals business.
  • EV Manufacturing: Ashok Leyland shifted its electric bus production from the UK to Dubai due to the superior business environment and logistics.
  • Solar Plus Storage Project: L&T is constructing one of the world’s most ambitious solar-plus-storage projects in Abu Dhabi.
• UAE Investment in India:
  • Ports and Logistics Infrastructure: DP World has committed $5 billion to Indian ports and logistics parks.
  • Banking Sector: Emirates NBD purchased a majority stake in RBL Bank, marking the largest FDI in Indian banking history.
  • Energy Security: The Abu Dhabi National Oil Company (ADNOC) has signed long-term LPG supply agreements with Indian PSUs like Indian Oil and HPCL.
  • Sovereign Wealth Funds: The Abu Dhabi Investment Authority (ADIA) was the first such fund to establish a base in India’s GIFT City, while Mubadala has invested $4 billion in healthcare and renewable energy.

Strategic Policy Architecture

• India–UAE Comprehensive Economic Partnership Agreement: Reduced or eliminated tariffs on nearly 90% of tariff lines, accelerating trade diversification beyond hydrocarbons.
• Bilateral Investment Treaty (2024): Strengthens investor protection, dispute resolution mechanisms, and long-term capital confidence.
• Strategic Defence Partnership: Deepens security cooperation, reinforcing economic ties with geopolitical stability.

Future Frontiers: Bharat Mart and AI

• Bharat Mart Initiative: Establishment of a wholesale hub in the United Arab Emirates to serve as a gateway for Indian exports to Africa, West Asia and Eurasia, enhancing India’s global market access.
• Artificial Intelligence Collaboration: Artificial Intelligence is emerging as the next major frontier of the India–UAE corridor.
  • India is hosting the AI Impact Summit in New Delhi (February 16–20, 2026), the first global AI summit held in the Global South.
  • The UAE, which appointed the world’s first Minister of State for AI in 2017, has invested heavily in AI infrastructure and research.
• Broader Strategic Realignment: The Delhi Declaration reflects the expansion of India–Arab cooperation across the economy, energy, technology, and security.

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Conclusion

The India–UAE Economic Corridor transforms bilateral trade into a strategic geo-economic partnership. It advances Viksit Bharat 2047 through capital inflows, technology transfer, and global value chain integration.

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