India’s trade with the UAE to surpass $100 billion goal well ahead of 2030 target

25 September 2024 Consultancy.in

The bilateral trade between India and the United Arab Emirates (UAE) is on course to surpass the ambitious target of $100 billion well ahead of the 2030 deadline, according to a report from Primus Partners.

The economic value of trade between the two nations has experienced substantial growth in recent years, reaching $85 billion in the fiscal year 2022/23, up 13% on the year previous, underscoring the UAE’s position as India's third-largest trading partner and second-largest export market.

India’s key exports to the UAE encompass a range of products including precious metals, stones, gems and jewellery, minerals and refined petroleum products, an assortment of food items like cereals, sugar, fruits, vegetables, tea, meat, and seafood, textiles such as garments, apparel, synthetic fibres, cotton, and yarn, along with engineering and machinery products and chemicals.

In addition, technology solutions and services are emerging as another cornerstone of bilateral trade.

India's trade with the UAE to surpass $100 billion goal well ahead of 2030 target

Source: Primus Partners

The role of CEPA and structural reforms

The robust trade growth reflects the deepening economic ties between the two nations, particularly after the recent visit of Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi, to India. His meeting with Indian Prime Minister Narendra Modi resulted in the signing of five Memoranda of Understanding (MoUs), further solidifying a partnership that has flourished due to significant structural reforms, including the Comprehensive Economic Partnership Agreement (CEPA) established in 2022.

The CEPA between India and the UAE has been a transformative force in the economic relations between the two nations. By dismantling long-standing trade barriers, it has facilitated smoother trade operations and encouraged collaboration across various sectors. The agreement has bolstered traditional industries such as oil & gas, gems & jewellery, and information technology, while also paving the way for sectors like green energy, food, and advanced technology.

Commenting on the developments, Nilaya Varma, CEO and Co-founder of Primus Partners, said: “India-UAE trade relations are entering a new era, driven by structural reforms like CEPA that have dismantled long-standing barriers. The partnership is now more strategic and forward-looking, setting the stage for both nations to leverage their complementary strengths and create an integrated trade ecosystem that will be critical in navigating the shifting dynamics of global commerce.”

Trade corridor
One of the key drivers of the growing ties between India and the UAE is the India-Middle East-Europe Economic Corridor (IMEEC). This ambitious initiative aims to improve regional connectivity by integrating railway lines, sea routes, road networks, electricity grids, optical fibre cables, and hydrogen gas pipelines, with the goal of streamlining trade and enhancing global supply chains.

India's trade with the UAE to surpass $100 billion goal well ahead of 2030 target

Source: Primus Partners

IMEEC is expected to revolutionize trade and regional development by providing a seamless network of transportation and communication infrastructure that spans multiple continents. By leveraging this corridor, India can increase foreign investment, create new jobs, and improve its global presence.

The trade corridor is also seen as a potential alternative to China’s Belt and Road Initiative (BRI), positioning India and the UAE as major players in shaping future trade routes and economic strategies.

Five recommendations

As the India-UAE partnership continues to evolve, Primus Partners outlined five strategic recommendations in its report that could “further strengthen” the bilateral relationship.

India's trade with the UAE to surpass $100 billion goal well ahead of 2030 target

Source: Primus Partners

The first recommendation is to implement a master dashboard to oversee critical infrastructure projects, particularly within the IMEEC framework. The second focuses on commerce, with the consultants recommending the two nations to build a bilateral e-commerce marketplace for goods and services under the CEPA framework.

The management consulting firm also emphasizes the importance of promoting sustainable environmental practices. This includes enhancing water management systems and improving people-to-people linkages through collaborative cultural and educational exchanges. The creation of a unified tourism booking platform, focusing on luxury, religious, and business travel, is another initiative.

Finally, Primus Partners promotes the establishment on an online digital repository that can highlight investable projects in identified strategic sectors to key decision-makers.

“As the trade relationship evolves, we expect to see transformative impacts across the region and beyond, reshaping global trade dynamics in the coming decades,” concluded Varma.

In February this year, India Prime Minister Narendra Modi visited the UAE for the seventh time since he came into office, highlighting the important economic and historic ties between the nations.

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