India-UAE partnership: A vision for 2030 and a new global order
The India-UAE bilateral trade partnership is poised to significantly reshape global dynamics by 2030. A pivotal moment in this collaboration was Prime Minister Narendra Modi's seventh visit to the UAE in February 2024, during which seven Memoranda of Understanding (MoUs) were signed across key sectors, including trade, energy, infrastructure, and cultural exchange. These agreements represent a notable milestone in the strategic alliance between the two nations.
Comprehensive economic framework
At the heart of this partnership lies the Comprehensive Economic Partnership Agreement (CEPA), which was established in 2022. This agreement is vital in enhancing bilateral trade by streamlining transactions, attracting investments, and removing trade barriers. CEPA not only facilitates Indian exporters' access to Gulf Cooperation Council (GCC) states—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE—but also opens avenues to markets linked to the UAE’s Free Trade Agreements with entities such as the European Union, Singapore, and select North African nations.
A catalyst for economic cooperation
In the fiscal year 2022-23, the UAE emerged as India’s third-largest trading partner and second-largest export destination, with bilateral trade soaring to USD 85 billion. The recent agreements signed during Prime Minister Modi’s visit are anticipated to propel progress toward the ambitious target of USD 100 billion in bilateral trade by 2030, with many projections indicating that this goal could be achieved ahead of schedule.
Beyond numerical growth, the economic partnership represents a broader strategic vision. India's involvement in the India-Israel-UAE-US (I2U2) grouping and the Abraham Accords reveals new opportunities for diplomatic and economic collaboration, reinforcing India’s strategic importance in the region. Furthermore, the India-Middle East Europe Corridor (IMEEC) is a crucial element of this partnership, providing a viable alternative to China’s Belt and Road Initiative (BRI) and generating significant economic prospects across Africa, Eastern Europe, and South Asia.
The significance of His Highness Sheikh Khaled's visit
The recent official visit of His Highness Sheikh Khaled bin Mohamed bin Zayed Al Nahyan to India on September 9-10, 2024, further exemplifies the mutual commitment to strengthening the India-UAE Comprehensive Strategic Partnership. The discussions covered vital sectors including nuclear energy, artificial intelligence, critical minerals, and green hydrogen. During this visit, several MoUs were signed, addressing nuclear cooperation, long-term LNG supply, food park development, and crude oil storage. These agreements underscore the nations' shared commitment to enhancing energy security and fostering economic collaboration.
Investment opportunities and the path forward
The UAE has historically been a significant contributor to Foreign Direct Investment (FDI) in India, accounting for approximately 3 per cent of cumulative FDI equity inflow from April 2000 to December 2023—around USD 18 billion—making it the seventh-largest source of FDI in India. In FY 2022-23 alone, India received USD 2.92 billion in FDI equity inflow from the UAE. As this partnership matures, joint ventures and collaborative projects—especially in the Middle East, South Asia, and Africa—will present robust opportunities for sustained economic growth.
Strategic recommendations for future collaboration
To fully capitalise on the potential of the India-UAE partnership, several strategic recommendations have been proposed:
Master dashboard implementation: Establish a comprehensive dashboard to oversee critical infrastructure projects within the IMEEC framework, ensuring timely execution and transparency.
Bilateral e-commerce marketplace: Create a digital marketplace for goods and services under the CEPA framework, leveraging initiatives like the Open Network for Digital Commerce (ONDC) to facilitate a unified market.
Investment promotion repository: Develop an online repository that showcases investable projects across prioritised sectors to attract increased investment.
Water security initiatives: Promote regional water security through the establishment of an International Water Credit Exchange Market, ensuring sustainable growth practices.
People-to-people connectivity: Enhance cultural and business exchanges by creating a unified tourism booking platform and special enclaves for luxury, religious, and business travel.
Conclusion
The five strategic recommendations outlined are designed to foster growth in this new global order. They highlight the significance of advanced digital platforms for efficient governance, real-time data-driven decision-making, and holistic socio-economic progress. Advocating for technology's role in levelling the playing field for micro, small, and medium enterprises (MSMEs) through a bilateral e-commerce platform, alongside implementing essential environmental measures and promoting interpersonal connectivity, is crucial for ensuring sustainable development.
As we look ahead to 2030, India and the UAE are united in their vision to spearhead a more interconnected, resilient, and inclusive future. This collaboration establishes a new precedent for international cooperation, paving the way for shared prosperity and growth.