INDIA - UAE RELATIONS – INTERNATIONAL
News: Bridging
the Gulf
What's in the news?
● Shaped
by millennia-old journeys of cultural and economic engagement on the Indian
Ocean’s network of exchange, the India-UAE relationship is today more than an
economic partnership.
● It
speaks to the Emirates’s deep, fraternal, and strategically important
relationship with India, and reinforces the UAE’s position as an economic hub
for India to undertake sustainable and diversified growth through our strategic
location at the intersection of global trade.
Key takeaways:
● The
India-UAE partnership was forged first on the trade of traditional items, and
then strengthened with oil.
● It
found a formal dimension after the creation of the UAE Federation in 1971, and
then accelerated in the 1990s, when a liberalized India embraced the
opportunity to export to the UAE and markets beyond.
● The
emergence of the UAE as India’s
third-largest trading partner has only underlined the positive outlook the
two countries share towards economic cooperation.
● The
two countries share strong cultural and
people-to-people ties, with a significant Indian diaspora in the UAE.
● The
UAE has been a key partner in India’s development agenda, including investments in the oil and gas sector,
renewable energy, and infrastructure.
● The
UAE has also been supportive of India’s efforts in combating terrorism and enhancing security cooperation.
India- UAE Comprehensive Economic Partnership
Agreement (CEPA):
● The
India-UAE Comprehensive Economic Partnership Agreement (CEPA) is a bilateral trade agreement that aims to
strengthen economic ties between the two countries.
● The
CEPA covers a wide range of subjects, including trade in goods, trade in services, investment, intellectual property
rights, and competition policy.
● The
CEPA has been in the making for several years, with negotiations starting in
2017 and the agreement finally coming into force on May 1, 2022.
● The
agreement builds on the decades of mutual enterprise between the two countries,
with the UAE emerging as India’s third-largest trading partner.
Significance of India-UAE CEPA:
1. Increased trade:
● The
CEPA is expected to significantly increase trade volumes between India and the
UAE, with the potential to create new
investment opportunities and increase business partnerships.
● This
will help both countries to diversify their trade relationships beyond their
traditional trading partners.
2. Diversified trade:
● The
CEPA covers a wide range of subjects, including trade in goods, trade in
services, investment, intellectual property rights, and competition policy,
allowing for a more diversified trade relationship between the two countries.
3. Access to new markets:
● The
CEPA is inspiring innovators and investors, catalyzing SMEs, startups, and India Inc to make decisive inroads
into new markets, particularly the Emirati market, and from there to the Middle
East, Africa, and Europe.
4. Support for entrepreneurship:
● The
CEPA provides support for startups in both India and the UAE, enabling them to
explore growth and diversification into each other’s markets, as well as other
markets in the region and beyond.
● The
India-UAE Startup Bridge will also
enable them to attract investment from venture capitalists and angel investors.
5. Addressing developmental challenges:
● The
CEPA provides a trade lens to tackle issues such as energy and food security, agriculture, and sustainability, making
it a strategic catalyst in addressing vital developmental challenges.
WAY FORWARD:
1. Strengthening infrastructure
- India and the UAE can collaborate to strengthen infrastructure, including
ports, airports, and logistics networks, to facilitate the movement of goods
and people between the two countries.
2. Enhancing cooperation in emerging sectors
- The two countries can explore cooperation in emerging sectors such as
renewable energy, artificial intelligence, and fintech, among others, to
promote innovation and economic growth.
3. Promoting investment
- Both India and the UAE can take steps to promote investment in each other’s
markets, including through the creation of investment promotion agencies,
bilateral investment treaties, and other measures.
4. Strengthening cultural ties
- Cultural exchanges and people-to-people contacts can be further enhanced to
deepen the historical and cultural ties between the two countries.
5. Addressing developmental challenges
- The CEPA provides a platform for addressing key developmental challenges
faced by both countries, such as energy and food security, sustainability, and
agriculture. Further efforts can be made to leverage this platform to achieve
meaningful progress in these areas.
The
UAE-India CEPA has unlocked new possibilities for multi-sectoral collaboration and partnerships, leading the nations
to build competitive, resilient, sustainable, and vibrant economies.