India-UAE Bilateral Trade To Hit $100 Bn In 5 Years: Report
In 2023, inflationary pressures softened in the UAE amidst tighter monetary policies
While talking about the United Arab Emirates' strategic shift towards economic diversification and sustainable growth, Rubix Data Sciences in its latest report has revealed that India and UAE bilateral trade is all set to hit USD 100 billion in five years.
The report stated that the comprehensive economic partnership agreement (CEPA) has played a key role in 16 per cent year-on-year (YoY) trade growth (exports and imports) in FY2023. India-UAE trade touched nearly USD 85 billion in FY2023 and the countries aim to take this to USD 100 billion in the next five years.
The share of mineral fuels and oil (refined) in India’s exports to the UAE increased from 21 per cent in FY2019 to 27 per cent in FY2023. Two products, namely mineral fuels and oils (crude), and gems and jewellery account for nearly 80% of India’s imports from the UAE.
Owing to the CEPA with India, nearly 90 per cent of India’s exports to the UAE now attract zero duty. India’s exports to the UAE recorded 12.7 per cent growth in FY2023 YoY, touching USD 31.6 billion.
India’s imports from the UAE recorded 18.7 per cent growth in FY2023 YoY touching USD 53.2 billion.
In February 2024, India’s payment system, UPI, was linked with UAE’s instant payment system Aani. This initiative is likely to benefit more than 3.5 million Indians living in the UAE as well as travellers between the two countries. Further, India’s Rupay cards can also be used in the UAE.
In FY2024 (April to December), UAE emerged as the fifth largest foreign investor in India, up from the seventh spot in FY2022, with inflows of USD 2.4 billion for the nine months ending in December 2023.
UAE’s sovereign fund has been an active participant in the Indian stock market with Abu Dhabi Investment Authority (ADIA) holding 22 listed stocks across diverse sectors such as real estate, infrastructure, logistics, food, etc, as per a December 2023 filing.
Reports also suggest that ADIA has plans to set up a USD 4 to 5 billion fund to invest in India through Gift City, Gujarat.
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