UAE, India sign 'milestone' pact to boost trade, investment ties

DUBAI: The United Arab Emirates and India on Friday signed a a broad trade and investment pact to boost trade and investment Friday, as the countries seek to bolster their economies after the coronavirus pandemic.

Abu Dhabi Crown Prince Mohammed bin Zayed Al-Nahyan, the UAE’s de facto ruler, and India’s Prime Minister Narendra Modi held a virtual summit to witness the signing of the Comprehensive Economic Partnership Agreement, among other pacts.

The virtual signing ceremony marks the first trade deal sealed by the Gulf state since it began pursuing such pacts last September in a bid to strengthen its status as a business hub.

The deal’s signing “is a milestone event in our bilateral relations”, the official Emirati news agency WAM quoted Indian Foreign Minister S Jaishankar as saying. “It will open new opportunities in both trade in goods and services, and will lead to enhanced investments,” he added.

The Comprehensive Economic Partnership Agreement (CEPA) is expected to boost annual bilateral non-oil trade from $60 billion to $100bn within the next three to five years, India’s Prime Minister’s office said.

The UAE is India’s third-largest export destination with nearly $16 billion clocked in 2020-21, WAM added. Major exports include petroleum products, precious metals, stones, gems and jewellery, minerals, food items and textiles.

The UAE hopes that non-oil trade with India will rise from pre-pandemic levels of $40 billion to more than $100 billion within five years, WAM said.

 “There will be a huge flow of trade and investments between both nations and it’s going to open the door for more business opportunities,” Emirati Minister State for Foreign Trade Thani Al Zeyoudi told Reuters.

The two countries have had close and friendly ties for decades, establishing diplomatic relations in the early 1970s — shortly after the Gulf country’s founding. Indians in the UAE make up the largest expatriate community, approximately 35% of its 10 million strong population.

Remittances sent back to India from its citizens in the Emirates reached more than $17.06 billion in 2019, according to the Indian foreign ministry. Earlier this week, the UAE signed a similar package of deals with Turkey.