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India – United Arab CEPA negotiations launched


India and the United Arab Emirates (UAE) formally launched negotiations on the India-UAE Comprehensive Economic Partnership Agreement (CEPA).


GS-III: Indian Economy (International trade), GS-II: International Relations (Foreign Policies and Agreements Affecting India’s Interests)

Dimensions of the Article:

  1. About India’s CEPA agreements
  2. India-UAE Relations
  3. Recent Developments in India-UAE relations

About India’s CEPA agreements

  • India has signed CEPAs with South Korea and Japan and the one in negotiation with UAE  is expected to increase bilateral trade in goods to USD 100 billion within five years of the signed agreement and increase trade in services to USD 15 billion, leading to wider social and economic opportunities in both nations.
  • CEPAs are a kind of free trade pacts but these agreements or cooperation agreements are more comprehensive than Free Trade Agreements.
  • CEPA usually covers negotiation on the trade in services and investment, and other areas of economic partnership. It may even consider negotiation on areas such as trade facilitation and customs cooperation, competition, and Intellectual Property Rights. It also looks into the regulatory aspect of trade and encompasses an agreement covering the regulatory issues.

India-UAE Relations

  • The UAE and India had enjoyed close and friendly ties based on historic and cultural ties. People-to-people contacts and barter trade for clothes and spices from India in exchange for dates and pearls from the region have existed for centuries.
  • India–United Arab Emirates (UAE) relations have a strong basis on the fact that Indians make up the largest minority ethnic group in the UAE making up roughly 38% of UAE’s total residents.
  • The UAE is India’s top trading partner in the entire West Asia and North Africa region.
  • Indian exports to the UAE account for 6% of India’s global exports.
  • UAE has been one of India’s leading sources of FDIs – UAE is the eighth-largest investor in India. Also, investment by Indian companies in the UAE is valued at around $85 billion.
  • UAE is India’s third largest trade partner after China and the United States.
  • The UAE accounts for 8 percent of India’s oil imports and was fifth largest supplier of crude oil to India.
  • Major exports to the UAE comprise of stones, petroleum products, precious metals, gems and jewellery, minerals, food items like sugar, cereals, fruits & vegetables, meat, tea, meat & seafood, textiles, chemicals and engineering & machinery products.
  • India imports crude petroleum and petroleum products, precious metals, minerals, stones, gems & jewellery, chemicals & wood and wood products from UAE.
  • Another significant pillar of India-UAE ties is reflected in their growing cooperation in security and defense sector.

Other Recent Developments in India-UAE relations

  • Since 2014, India has worked with UAE on various counter-terrorism issues.
  • In 2018, a Memorandum of Understanding (MoU) was signed between India and the UAE on Technical Cooperation in the Rail Sector. It provided a platform for Indian Railways to interact and share their latest developments and knowledge in the railway sector.
  • In 2018, Indian PM Modi described UAE’s humanitarian support for those affected by the Kerala floods that year as “[reflecting] the special ties between governments and people of India and UAE”.
  • 2021, UAE and India signed an agreement under which faculty members from Indian universities will spend six to 10 months every year for undertaking research and teaching social sciences in Abu Dhabi. This agreement was aimed at deepening the academic and cultural ties between the two nations.
  • India-UAE relations has become a pivot of India’s Extended Neighborhood and Look West Policy in the region.
  • The recent signing of The Abraham Accords have created a fresh opportunity for even greater India-UAE coordination and cooperation.

-Source: PIB

February 2024