With an aim to strengthen their ever-expanding bilateral relations, the UAE and India are holding discussions to strike a Comprehensive Economic Partnership Agreement (CEPA) by early 2022, growing the non-oil trade between them to $100 billion in the next five years.

A Long-Term Relationship

As per the UAE’s Ministry of Economy, the initiative will not only give a major fillip to the commercial activities but also open a new phase of strategic cooperation between the two nations. “Both sides have drawn up a very aggressive and ambitious time-frame and aim to conclude negotiations by December 2021,” Indian Commerce Minister Goyal said at a press conference on Wednesday. “We hope to sign formal agreements in early 2022.”

The UAE has been an important trade partner of India for over five decades. The Middle East country is India’s second-largest export destination after the US, with $29 billion of value in 2019-2020. India accounts for 9% of the total foreign trade and 13% of non-oil exports of the UAE.

The UAE imports petroleum products, precious metals, stones, jewelry, minerals, food items, and others from India and exports chemicals, electronic equipment, plastics, and wood articles.

Moreover, the Middle East nation is the eighth largest investor in India, with $11 billion between April 2000 and March 2021. According to official data, investments by Indian companies in the UAE are approximately over $85 billion. In June last year, Abu Dhabi’s strategic sovereign fund Mubadala Investment Company invested $1.2 billion in India’s telecom provider Jio. In 2019, UAE entities committed $7 billion to create a food corridor between the UAE and India to provide a stable market for farmers.

“The two partners feel that the possibilities are far more than as both goods and services will complement each other. Given the strong growth prospects of the Indian economy, we look forward to increased investment from the UAE in diverse sectors of India,” Goyal added.

The World Trade Organization predicted the volume of world merchandise trade would grow 8% in 2021, and the International Monetary Fund expects the global economy to expand by 6 % in the same year. Therefore, the UAE is taking the chance to strengthen its economic ties with its major partners. After India, the country will engage in similar negotiations on CEPA with Indonesia.

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