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UAE investments in India rise to $3.4bn

Indian commerce and industry minister Piyush Goyal and the UAE's Dr Thani bin Ahmed Al Zeyoudi at the India-UAE Cepa's first joint committee meeting

The UAE has become the fourth largest investor in India, as foreign direct investment (FDI) jumped over three-fold to $3.35 billion in 2022-23

One of the driving factors for the increase is the signing of the comprehensive economic partnership agreement (Cepa), which came into effect on May 1 2022.

Under the deal, several goods from both countries get zero-duty access to each other’s markets, it also eased norms for promoting investments.

The Emirates was the seventh largest investor in India in 2021-22, with $1.03 billion of FDI, according to data from the government’s industry promotion and internal trade department.

The UAE’s investments in India include services, sea transport, power and construction sectors. Between April 2000 and March 2023, the Emirates accounted for approximately 2.5 percent of India’s total FDI, amounting to $15.6 billion.

Following the first joint committee meeting of the India-UAE Cepa in New Delhi, India’s Commerce and Industry Minister Piyush Goyal said that discussions between the central banks of India and UAE on promoting bilateral trade in the rupee and dirham are progressing at a “very” fast pace.

“As the top leaders of both countries are decisive, one can imagine good outcomes very soon on this,” he added.

The talks started in March 2022 and the minister said that both countries have made significant progress.

Singapore is the biggest investor in India, putting $17.2 billion in the country over 2022-23, followed by Mauritius ($6.1 billion) and the US ($6 billion).