UAE and India in talks to expand annual trade beyond $100bn

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• Eight new sectors targeted
• $100bn goal already exceeded
• Deals paid for in dirhams or rupees

The UAE and India plan to extend their 10-year trade deal to eight new sectors to expand their annual bilateral trade beyond $100 billion, a senior Indian business council official has said.

These sectors include artificial intelligence, financial services, digital technologies and logistics.

The comprehensive economic partnership (Cepa) agreement – the UAE’s first –was signed in 2022 when bilateral trade stood at around $60 billion.

It has already exceeded its initial five-year target of $100 billion, Dr Sahitya Chaturvedi, secretary general of the Indian Business and Professional Council (IBPC), told AGBI. The IBPC is a business group with close ties to the Indian and UAE governments and advocates on behalf of members in trade discussions.

“We have only tapped into about 40 percent of the agreement’s potential so far,” Chaturvedi said. “We have reached the targets far ahead of schedule.”

IBPC

Analysts have previously said that India-UAE trade ties need to diversify beyond gemstones, jewellery and oil for the relationship to thrive. The Cepa removes four-fifths of duties on goods from both countries, with the aim to eventually eliminate all tariffs within 10 years. 

Chaturvedi said that initiatives like Dubai’s Bharat Mart, a showroom and warehousing project that aims to showcase thousands of Indian traders, exporters and manufacturers seeking to tap regional markets, could benefit.

He said there were still several market segments left to explore, including value-added trade where semi-finished products like marble from India’s Rajasthan province could be imported to the UAE, processed and re-exported with quality certifications.

Under the Cepa, the UAE and India have agreed to transact in local currencies, which has supported trade, Chaturvedi said.

“We can now trade directly using rupees and dirhams instead of relying on the US dollar,” he said. “This is a game-changer for businesses, especially in the logistics and SME sectors.”

However a review of the Cepa that has been under way since October is focused on concerns over a surge in precious metals and diamond trade. India is worried that potential loopholes and tariff concessions in the agreement could weaken domestic industries.

Chaturvedi dismissed the concerns, saying a review is standard for a “very comprehensive” trade deal of this scale. The hiccups are being “sorted out”, he said.

• UAE’s foreign trade hit new peak of $817bn in 2024
• Exports to India from UAE more than double in November
• Global trade will grow in 2025 despite tariff threats, says UAE

Satish Kumar Sivan, India’s Consul General to Dubai, said: “Indian institutions are expanding here to support industries, driving bilateral trade.”

He said that education is another sector ripe for expansion, with more Indian companies expected to set up in the UAE

Last year Abu Dhabi became home to the first international campus of the Indian Institute of Technology (IIT) Delhi – India’s most prestigious and competitive engineering, science and technology institute, often compared to the US’s Massachusetts Institute of Technology.

Some of the world’s top tech leaders have graduated from IIT, including Google CEO Sundar Pichai, billionaire Infosys co-founder Narayana Murthy and Vinod Khosla, co-founder of Sun Microsystems and founder of Khosla Ventures.