Wednesday 11 / June / 2025
The India–UAE (United Arab Emirates) CEPA (Comprehensive Economic Partnership Agreement), signed on 18th February 2022 and implemented from 1st May 2022, marks a landmark achievement in India’s foreign trade trajectory. Celebrating its third anniversary in 2025, the agreement has not only strengthened economic relations but also deepened strategic cooperation between two major players in Asia and the Middle East.
The CEPA, India’s first comprehensive FTA in the Middle East, covers trade in goods and services, rules of origin, digital trade, customs cooperation, and investment facilitation. It aims to boost non-oil trade to over USD 100 billion within five years and create tremendous jobs opportunities in both countries.
Three years on, the CEPA has significantly reduced tariff and non-tariff barriers, provided smoother market access for Indian exporters, and attracted UAE investors into key Indian sectors such as infrastructure, logistics, fintech, and renewable energy. The UAE, India’s third-largest trading partner and second-largest export destination, has emerged as a gateway to Gulf and African markets.
The India-UAE FTA has become a model for India's broader trade ambitions, combining economic benefits with geopolitical and cultural ties that have spanned centuries. It demonstrates how proactive diplomacy and economic strategy can work in tandem to deliver transformative outcomes.
India-UAE Trade Trajectory
India and the UAE share a robust and growing trade relationship that has evolved from energy-based exchanges to a multifaceted partnership encompassing manufacturing, gems and jewellery, agriculture, electronics, and emerging sectors like fintech and green energy.
Over the past five years, bilateral trade has surged despite global disruptions such as the COVID-19 pandemic and supply chain bottlenecks. The signing of the CEPA in 2022 marked a turning point, unlocking significant potential across multiple sectors.
India’s exports to the UAE have diversified from traditional products like textiles and gems to electronics, automobiles, food products, and engineering goods. On the other hand, India imports crude oil, petroleum products, precious metals, and chemicals from the UAE.
The CEPA has not only increased trade volumes but has also improved trade efficiency. Key sectors have benefitted from duty-free access and streamlined customs procedures. This trajectory indicates a long-term strategic alignment, with both nations investing in resilience, innovation, and diversification of their trade portfolios.
India and UAE witnessed steady growth in bilateral trade over the past five financial years, highlighting the impact of evolving policy and market dynamics. India's exports to the UAE have seen a notable increase, particularly after the implementation of the CEPA in FY 2022–23. India's growing exports to the UAE post-FTA implementation show enhanced market access and product diversification.Imports from the UAE, mainly comprising crude oil and precious metals, have also risen; the increase in total trade reflects the deepening economic integration and expanding commercial partnership. The bilateral trade doubled from USD 43.3 billion in 2020-21 to 85.61 in 2023-24 and rose to 105. 76 in 2024-25.
India’s exports to the UAE exhibit a wide range of product categories, reflecting a well-diversified trade basket. Gems and jewellery, including cut and polished diamonds and gold jewellery, have traditionally led India’s exports to the UAE. The sector has benefitted immensely from CEPA, with duties on certain jewellery items either reduced or eliminated, giving Indian exporters a competitive edge in the Gulf region.
Refined petroleum products are another major export segment, underscoring India’s strong refining capabilities and growing energy ties with the UAE. India also exports a large volume of textile and apparel products, including cotton yarn, readymade garments, and home furnishings, which cater to the UAE’s large expatriate population and regional demand.
Engineering goods and automobiles are gaining traction due to improved market access and rising demand for Indian vehicles and industrial machinery. In recent years, electronic goods, especially mobile phones and consumer electronics, have become significant contributors, driven by India’s expanding electronics manufacturing ecosystem. Moreover, agricultural exports like rice, tea, spices, meat, and seafood continue to strengthen India’s presence in the UAE’s food supply chain.
On the India’s imports form UAE, crude oil and petroleum derivatives dominate India’s imports from the UAE, playing a critical role in meeting its energy requirements. India also imports precious metals such as gold and silver in large quantities, which feed into its thriving domestic jewellery manufacturing industry. Other key imports include aluminum, fertilizers, sulphur, plastics, and chemicals, all vital for India’s manufacturing and agricultural sectors. These commodity exchanges reflect a strategic, resource-driven, and evolving partnership.
India-UAE Investment Relations
Investment flows between India and the UAE form a foundational pillar of their bilateral relationship, supporting infrastructure, technology, finance, and renewable energy sectors. The UAE is among the top 10 sources of Foreign Direct Investment (FDI) into India, with cumulative investments exceeding USD 15 billion.
On the other hand, Indian companies have established a strong footprint in the UAE, particularly in sectors like IT, education, construction, pharmaceuticals, and finance. Over 3,800 Indian companies operate in the UAE, benefitting from its liberal trade zones and investor-friendly environment. Indian retail giants, banks, and startups are increasingly exploring the UAE as a base for GCC and Africa expansion.
The CEPA has provided a structured framework to promote investment facilitation, ensure regulatory transparency, and protect investor interests. The recent agreements on bilateral investment promotion and cross-border digital infrastructure cooperation are expected to further unlock investment synergies in emerging sectors such as AI, semiconductors, hydrogen, and smart mobility.
Futuristic Outlook of India’s Trade with UAE
The future of India-UAE trade is poised for dynamic growth, underpinned by structural shifts, digital connectivity, and shared visions for sustainable development. CEPA has laid the groundwork for not just enhanced bilateral trade but also joint access to third-country markets, especially in Africa, West Asia, and Central Asia.
With trade already exceeding USD 85 billion, both countries are on track to reach the USD 100 billion non-oil trade in the next few years. This will be supported by further integration in renewable energy, fintech, supply chain digitization, and emerging tech sectors.
In green energy, the India-UAE Green Hydrogen Partnership has opened new channels of cooperation in solar power, clean mobility, and carbon-neutral logistics. Both are founding members of the International Solar Alliance and have launched joint ventures in solar panel manufacturing and energy storage.
The CEPA’s services trade chapter will significantly boost finance, healthcare, education, legal, and IT services. Mutual recognition of professional qualifications and reduced barriers in digital trade offer tremendous potential for Indian service providers.
Emerging areas of bilateral collaboration between India and UAE include artificial intelligence, semiconductor design, defence manufacturing, aerospace, cybersecurity, and blockchain infrastructure. With both governments facilitating ease of doing business, the private sector is well-positioned to capitalize on these futuristic opportunities.
In conclusions, the India-UAE FTA stands as a testament to visionary economic diplomacy, unlocking trade, investment, and innovation-led opportunities. Over three years, CEPA has catalyzed growth, diversified trade, and deepened bilateral trust. With supportive policy frameworks, private sector dynamism, and cultural closeness, the India-UAE economic relationship is poised to become a model for South-South cooperation. As both countries look toward the future, their partnership will be defined not just by shared prosperity, but also by shared responsibility in shaping a sustainable global economic order.
