Bilateral Economic & Commercial Relations

Brief on India-UAE Commercial Relations        
                                                                                      
India and UAE have shared trade links through the centuries. The trade, which was dominated by traditional items such as dates, pearl and fishes, underwent a sharp change after the discovery of oil in UAE (oil exports begun from Abu Dhabi in 1962). With the emergence of UAE as a nation in 1971, the bilateral trade started growing gradually over the years. The last decade has witnessed transformational change in the overall relations with the UAE, including economic and commerce relationship.

As India and UAE strengthened their cooperation, culminating into a Comprehensive Strategic Partnership in 2017, the trade relations also deepened. From US$ 180 million annually in the 1970s, the trade volume increased to US$ 83.65 billion in FY 2023-24. Today, the UAE ranks as India's third-largest trading partner and second largest export destination, with exports over US$ 35.62 billion in FY 2023-24. Meanwhile, India ranks as UAE’s second largest trading partner, with export of over US$ 48 billion in FY 2023-24. The trade basket between the two nations is well diversified, encompassing major products like petroleum products, gems and jewelry, food items, textiles, chemicals and engineering goods.

Investment has also become a significant component of this relationship. The two nations signed the Bilateral Investment Treaty in February 2024 which entered into effect from 31 August 2024. From April 2000 to March 2024, the cumulative FDI from the UAE into India amounted to US$ 18.5 billion, making UAE the seventh-largest overseas investor in India. UAE’s investments are well-diversified with focus on sectors like real estate, infrastructure, energy, private equity and financial services. UAE’s Sovereign Wealth Funds (SWF) have a strong presence in India. Abu Dhabi Investment Authority (ADIA), UAE’s largest SWF has recently established a subsidiary office in GIFT City, Gujarat. 

On the other side, though no official figures are available, Indian investments in the UAE are estimated to exceed US$ 85 billion. Many Indian companies have set up manufacturing units, either as joint ventures or in Special Economic Zones, producing cement, building materials, textiles, engineering products, consumer electronics. Additionally, Indian companies have invested in UAE’s tourism, hospitality, catering, healthcare, retail, and education sectors, with notable names like the Taj Group, BITS Pilani, Zee Entertainment, Ashok Leyland, Mahindra, and Dabur. Major Indian companies such as L&T, ESSAR, Punj Lloyd, Engineers India Ltd have obtained significant number of contracts in UAE. A range of public and private sector banks from India are also operational in the UAE, further strengthening economic ties.

On 18th February 2022, during the Virtual Summit between Hon’ble Prime Minister Shri Narendra Modi and H.H. President Sheikh Mohamed bin Zayed al Nahyan, the India-UAE Comprehensive Economic Partnership Agreement (CEPA) was signed. In July 2023, the two nations undertook a significant step in trade facilitation, by signing an MoU on Establishing a Local Currency Settlement System between the Reserve Bank of India and the Central Bank of the UAE. Additionally, there are ongoing efforts to integrate the instant payment platforms of India (UPI) and the UAE (AANI), and interlink domestic debit cards of India (RuPay) and UAE (JAYWAN).

In the last few years, economic and trade relationship between India and UAE has expanded to newer areas such as AI, innovative health care, Renewable Energy, fintech, critical minerals, civil nuclear energy cooperation, etc.

Last updated in November 2024