UAE-India CEPA impact: Bilateral non-oil trade reaches $50.5bn

The UAE’s Minister of State for Foreign Trade, Dr Thani bin Ahmed Al Zeyoudi, held a bilateral meeting with Piyush Goyal, India’s Minister of Commerce and Industry in New Delhi on June 12. The UAE minister was in the Indian capital to mark the first year of the Comprehensive Economic Partnership Agreement (CEPA) between the two countries.

Initial figures from the UAE Ministry of Economy indicate that in the first 12 months of the CEPA (from May 2022 to April 2023), bilateral non-oil trade reached $50.5bn, an increase of 5.8 per cent compared to the same period last year, as per state news agency WAM.

According to India’s Ministry of Commerce and Industry, bilateral trade between the two countries touched historic highs during the first year of CEPA’s implementation. Overall trade increased from $72.9bn in 2022 to $84.5bn in 2023. The trade saw a year-on-year increase of 16 per cent. During the CEPA implementation period (from May 22 to March 23), bilateral trade increased from $67.5bon (May 21-Mar 2022) to $76.9bn (May 22-Mar 2023) – an annual increase of 14 per cent.

Exports from India to the UAE also registered a multiyear high. During April-March period, Indian exports to the UAE increased from $28bn to $31.3bn; an increase of around $3.3bn; or 11.8 per cent year-on-year growth.

CEPA impact

Dr Thani Al Zeyoudi underscored the progress in bilateral relations and trade over the last year. “Since the implementation of the Comprehensive Economic Partnership Agreement between the UAE and India, we have witnessed real momentum in bilateral non-oil trade, which is keeping us on course to reach our target of $100bn by 2030.”

“But this was always more than just a trade deal, and the increased investment flows, joint ventures and deeper market penetration emphasise the real potential of the agreement. Our visit this week was both a celebration of the achievements to date and an opportunity to strengthen what is becoming a genuine partnership for growth,” he added.

Addressed the Business engagement on #IndiaUAECEPA along with UAE Minister of State for Foreign Trade H.E. @ThaniAlZeyoudi.

Highlighted how our partnership can pave the way for greater collaboration between our businesses across various sectors.???? pic.twitter.com/JpZ8fKQ7sl

— Piyush Goyal (@PiyushGoyal) June 12, 2023

The two ministers commended the effectiveness of the CEPA in promoting trade and investment, and restated their shared commitment to building a mutually beneficial partnership that delivers long-term prosperity.

The ministers witnessed the signing of the minutes of the meeting by the chief negotiators, which will help the development of the CEPA over the next two years.

Abdulla Al Shamsi, assistant under-secretary in the Industrial Development Sector, Ministry of Industry and Advanced Technology, emphasised the critical role of the Joint Committee to guarantee a mutually beneficial partnership that delivers long-term impact.

He said, “The UAE-India CEPA was designed to be a flexible document, able to continually adapt to the changing economic climate and evolving needs of each side. The Joint Committee is crucial to understanding not only the economic impact of the deal, but each side’s experiences of implementation and utilisation – and ensuring both nations are able to derive maximum benefits from it. This week’s meeting demonstrates the same trust and transparency that existed throughout the negotiations and will enable us to unlock new opportunities for our respective business communities.”

Piyush Goyal, Union Minister of Commerce and Industry of India affirmed that the UAE-India CEPA played a prominent role in consolidating economic and trade relations, driving further growth and prosperity and creating new opportunities and enablers for the private sector. He pointed out the agreement resulted in the growth of bilateral trade and enhanced the historic relations between the two countries.

The Indian minister also reviewed a number of economic initiatives, which will enhance the prospects for investment cooperation between India and the UAE by taking advantage of the promising investment opportunities in the markets of the two countries.

Following the UAE-India Joint Committee meet, Al Zeyoudi and Piyush Goyal addressed a meeting of business leaders from both the UAE and India, during which they gained insights into the private sector’s utilisation of the CEPA to date.

The UAE-India CEPA came into effect on May 1, 2022, and was the UAE’s first-ever bilateral trade deal. The agreement eliminated or reduced tariffs on more than 80 per cent of product lines, created new platforms for SME collaboration and promoted mutual investment flows.

The CEPA deal with India has been followed with similar bilateral agreements between the UAE and Israel, Indonesia, Türkiye and Cambodia, respectively.