New deal gives India and UAE plenty to smile about

@ThaniAlZeyoudi/Twitter

As the Comprehensive Economic Partnership Agreement between India and the United Arab Emirates comes into force, AGBI looks at a highly lucrative co-regional relationship

Of the many alliances that have sprouted out of the Middle East, the one between India and the United Arab Emirates (UAE) stands out – seemingly weathering all global political and economic storms.

This enduring – and highly lucrative – cultural bond has been founded across millennia, with trade existing for centuries. The relationship really flourished after the accession of Sheikh Zayed Bin Sultan Al Nahyan as the Ruler of Abu Dhabi in 1966 and subsequently with the creation of the UAE Federation in 1971. 

Ever since, both sides have been highly focused on enhancing relations in all fields.

New deal heralds bright future

The future of this relationship now looks even rosier due to a recently struck deal – the Comprehensive Economic Partnership Agreement (CEPA) – which allows most of India’s exports duty free access to the UAE. Trade volumes between India and the UAE have grown from $180 million in the 1970s to $60 billion in 2019; with CEPA, they are projected to reach $100 billion by 2030. 

As the UAE ramps up its economic partnership with its second-largest trade partner, business leaders are calling CEPA a “game-changer” for UAE-India trade ties and bilateral relations between the two countries.

“The new deal is a great step to accelerate the longstanding bilateral relations that India and the UAE share – it will not only boost economic growth but will also see growth in jobs and areas which have been considered secondary for business,” Vinayak Mahtani, CEO of bnbme Holiday Homes, told AGBI. 

His rapidly growing vacation rental firm allows people to list their holiday properties anywhere in the UAE, India or Qatar.

“The UAE has proven to be fertile ground for many years for Indian entrepreneurs and this deal will only enhance that relationship,” Mahtani added. “Indian businessmen have been involved in multiple sectors in the country, be it transport, IT, food processing, energy or more.  

“They have set benchmarks for success and are key contributors in driving the economic growth of the nation. With CEPA in place, the UAE will remain as the centre of attraction for Indian investors given the robust business ecosystem it offers and quick growth.”

India’s finance minister, Nirmala Sitharaman, described the deal as a gateway for trade into the Gulf and Africa. 

“This is an outcome of several years of engagement,” she said. “The UAE is the threshold of the entire African Union and the Middle East. An agreement with the UAE opens the doors for India in these two regions as well.”

Thani Al Zeyoudi, the UAE’s Minister of State for Foreign Trade, described CEPA as “…a comprehensive win-win.”

India’s optimism for business in the UAE post-pandemic

As the UAE eases out of the pandemic, Indian business chiefs in the country are seeing promising signs that the most stricken industries are rebounding. They view deals like CEPA as essential to keep things on track. 

Sanjay Vazirani, CEO of Foodlink Global Restaurants & Catering Services – a Mumbai-founded pioneer in catering for international destinations weddings – said his company fortified its presence by rolling out nine more restaurant and cloud kitchen units in Dubai and Sharjah in 2021, while also setting up a regional office and starting catering operations. 

“In 2020, while India was at a standstill due to the pandemic, the UAE was effectively manoeuvring through it,” he told AGBI.

“Hats off to Dubai in particular for attracting destination weddings by offering regular retreats and familiarisation trips to network with the world’s best wedding experts, and expose them to experience the city’s diverse offerings and services. 

“The government works closely with stakeholders to showcase the hotels, ease of connectivity, state-of-the-art venues, and excellent infrastructure. They are ahead whether in technology, safety and compliances or ease of doing business, supply chain, and visa processes.”

As the effects of CEPA come to fruition, more Indian entrepreneurs are predicted to plant a flag in the ground in the UAE – becoming the next generation of high-profile leaders making their mark. 

They can look to trailblazers such as MA Yussuff Ali, managing director of Lulu Group and Micky Jagtiani, chairman of Landmark Group. Indian leaders regularly top regional rich lists and continue to aggressively expand their business empires in the UAE.