India-UAE Bilateral Trade Surpasses $100 Billion Milestone Under CEPA
The Comprehensive Economic Partnership Agreement (CEPA) between India and the United Arab Emirates continues to strengthen economic ties, driving bilateral merchandise trade beyond the historic $100 billion mark. Commerce and Industry Minister Piyush Goyal highlighted this achievement, noting that the pact has not only boosted direct trade volumes but also opened new avenues for services and value-added exchanges between the two nations.
The agreement, signed in February 2022 and effective from May 1, 2022, stands as a model of modern economic cooperation. It has accelerated market access, reduced trade barriers, and fostered deeper integration across goods, services, and investments.
Background of the CEPA
The India-UAE CEPA represents India's first comprehensive trade pact with a Gulf country, completed in record time. It provides significant tariff reductions on a vast majority of products, enhanced market access for services in multiple sectors, and frameworks to facilitate investments and regulatory cooperation. Since its implementation, the agreement has transformed the bilateral economic relationship from one focused primarily on energy and traditional commodities into a diversified partnership spanning high-value sectors.
Trade Performance and Remarkable Growth
Bilateral merchandise trade has demonstrated robust momentum in recent years. Figures for financial year 2025-26 show total trade reaching $101.25 billion, an increase from $100.03 billion in the previous year. India's exports to the UAE rose by about 2 percent to $37.36 billion, while imports grew 0.77 percent to $63.89 billion. This performance reflects steady expansion across diverse categories, including gems and jewellery, engineering goods, electronics, agriculture and processed foods, pharmaceuticals, and textiles.
The UAE has emerged as one of India's top trading partners and a key export destination. Non-oil trade, in particular, has recorded strong double-digit growth in recent periods, with notable surges in the first half of 2025. This diversification underscores the CEPA's success in broadening the trade basket and creating opportunities for higher-value exchanges. Services trade has also expanded steadily, contributing additional depth and resilience to the economic relationship.
Deepening Investment Flows
Investment linkages between the two countries have gained significant strength alongside trade growth. Foreign direct investment from the UAE into India reached $4.34 billion in FY 2024-25, with inflows of $2.45 billion recorded during April to December of the following financial year. Indian enterprises, meanwhile, are actively investing in the UAE, with India emerging as a leading source of greenfield foreign direct investment into the emirate in 2025.
These capital flows support collaboration in sectors such as energy, logistics, food processing, technology, and infrastructure. Joint projects and supply chain integration efforts are enhancing economic interdependence and creating mutual benefits for businesses and communities in both nations.
Strategic Importance as a Gateway
The CEPA extends beyond bilateral exchanges by positioning the UAE as a strategic hub for Indian businesses. It facilitates access to broader markets across Africa, the GCC region, the Middle East, CIS countries, and parts of Europe. This connectivity enables Indian exporters to expand their global footprint while allowing the UAE to strengthen its role as a trade and investment centre.
High-level engagements, including the third CEPA Joint Committee Meeting and visits by senior leaders, have reinforced commitments to resolve operational issues, improve regulatory alignment, and explore new areas of cooperation such as renewable energy, food security, and digital economy initiatives.
The MGMM Outlook
The Comprehensive Economic Partnership Agreement between India and the United Arab Emirates has rapidly evolved into a cornerstone of modern economic collaboration, pushing bilateral trade past the $100 billion mark and signaling a clear shift toward a more diversified and resilient partnership. What was once largely centered on energy trade has expanded into high-value sectors such as engineering goods, electronics, pharmaceuticals, and agriculture, reflecting a deliberate move toward value-added exchanges. The steady rise in non-oil trade and services highlights how reduced tariffs, improved market access, and streamlined regulations are actively reshaping trade dynamics and enabling businesses on both sides to explore new growth avenues.
Alongside trade expansion, the strengthening of investment flows and strategic positioning of the UAE as a global gateway is creating deeper economic interdependence. Indian businesses are leveraging the UAE’s connectivity to access markets across the Middle East, Africa, and beyond, while Emirati investments are supporting key sectors within India, from infrastructure to technology. Continuous high-level engagement and policy coordination are ensuring that the agreement remains adaptive and forward-looking, opening doors to emerging areas such as renewable energy, digital economy, and food security, while reinforcing the long-term trajectory of a robust and future-ready partnership.
(Sources: The Hindu BusinessLine, Business Standard)
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