Foreign entrepreneurs, chiefly from India, drive economic expansion in the United Arab Emirates, operating a substantial 225,000 ventures in the region.
UAE-India Economic Partnership Soars with CEPA
The Comprehensive Economic Partnership Agreement (CEPA) between the United Arab Emirates (UAE) and India, signed in May 2022, has significantly boosted bilateral trade and business relations. By Q1 2025, the agreement has nearly doubled the trade volume, reduced tariffs on 80% of traded goods, and stimulated foreign direct investment flows between the two countries.
According to Humaid Mohammed bin Salem, Secretary-General of UAE Chambers, the surge in Indian business activity in the UAE is a direct result of the CEPA. In its second year, non-oil bilateral trade reached a record US$56.1 billion, marking a 10.1% rise from its first year. This growth is a testament to the UAE's progress, as emphasized by Bin Salem.
The UAE, considered a global investment hub, has seen an influx of Indian investors, with over 225,000 companies registered with UAE chambers of commerce by the end of Q1 2025. This milestone, reported by the Federation of UAE Chambers of Commerce and Industry, underscores the confidence Indian investors have in the UAE's investment landscape.
CEPA has played a pivotal role in evolving UAE-India relations into a multi-dimensional partnership, with trade and business collaboration at its core. The agreement has contributed to the diversification of the UAE's economy and international collaboration, making it an even more attractive destination for global investors.
Beyond trade, CEPA has accelerated cooperation in emerging and strategic sectors such as artificial intelligence, innovative healthcare, renewable energy, fintech, critical minerals, and civil nuclear energy. In July 2023, India and UAE signed an MoU to establish a Local Currency Settlement System between their central banks, and efforts to link instant payment platforms and domestic debit cards have eased financial transactions and cross-border trade.
The UAE is India’s third-largest trading partner and second-largest export destination, with exports exceeding US$36.63 billion in FY 2024-25. The trade volume has seen substantial increases, with petroleum crude and products as major imports to India from the UAE, alongside growth in Indian agricultural and pharmaceutical exports.
The CEPA has catalyzed a comprehensive economic partnership enhancing trade volumes, investment flows, startup integration, financial interoperability, and diversified sectoral cooperation between India and the UAE. The UAE and India aim to push bilateral trade to US$100 billion by 2030, further reinforcing their strategic economic alliance.
Investing in the UAE has been stimulated due to the CEPA, as evidenced by the surge in Indian investors, with over 225,000 companies registered with UAE chambers of commerce by Q1 2025.
The increased foreign direct investment (FDI) flows between the two countries, as a result of the CEPA, have contributed to the diversification of the UAE's economy and international collaboration.
Moreover, CEPA has fostered collaboration in various sectors, such as artificial intelligence, renewable energy, fintech, critical minerals, and civil nuclear energy, through initiatives like the Local Currency Settlement System and links to instant payment platforms and domestic debit cards, making cross-border trade and financial transactions easier.
