Mumbai, 24 September 2024 – Primus Partners, India’s leading home-grown consultancy firm, has today unveiled an in-depth analysis of the India-UAE economic relationship, something that got strengthened with the recent visit of UAE President Sheikh Khaled bin Mohamed bin Zayed Al Nahyan to India. The analysis explores current trade patterns and future projections, indicating that bilateral trade between the two nations is on track to surpass the ambitious $100 billion target well before 2030. This impressive growth is underscored by a notable 12.7% year-on-year increase.
Key Insights:
- In 2022, the historic India-UAE Comprehensive Economic Partnership Agreement (CEPA) was enacted and came into force. Prime Minister Modi’s 7th visit to the UAE led to pivotal MoUs on trade, energy, infrastructure, culture & people-to-people initiatives
- UAE remains India’s 3rd largest trading partner and 2nd largest export destination (FY 2022-23)
- India solidifies its position as UAE’s 2nd largest trading partner (FY 2022-23)
- Bilateral trade reached $85 billion in FY 2022-23, expected to cross the 2030 target of USD 100 Bn well before the expected timeline
- Both countries lead the path for key Collaborative Ventures Including the India-Middle East-Europe Economic Corridor (IMEEC) as well as the India-Israel-UAE-US (I2U2) coalition
Nilaya Varma, CEO & Co-founder of Primus Partners, emphasized, “India-UAE trade relations are entering a new era, driven by structural reforms like CEPA that have dismantled long-standing barriers. This shows how this trade growth is not only strengthening existing sectors like gems, jewellery, and IT but is also paving the way for emerging industries such as green energy and food security. The partnership is now more strategic and forward-looking, setting the stage for both nations to leverage their complementary strengths and create an integrated trade ecosystem that will be critical in navigating the shifting dynamics of global commerce.” “As these initiatives unfold, we expect to see transformative impacts across the region and beyond, reshaping global trade dynamics in the coming decades,” concluded Nilaya Varma.
Looking forward, Primus Partners’ analysis outlines a series of strategic initiatives aimed at accelerating the India-UAE economic relationship that includes:
- Implementation of a master dashboard to oversee critical infrastructure projects, particularly within the IMEEC framework
- Establishment of a bilateral e-commerce marketplace for goods and services under the CEPA framework, potentially leveraging India’s Open Network for Digital Commerce (ONDC) model
- Creation of an online digital repository highlighting investable projects in identified strategic sectors
- Development of an International Water Credit Exchange Market to address water security challenges
- Introduction of a unified tourism booking platform and special enclaves catering to luxury, religious, and business travel
Nader Haffar, Director of Primus Partners UAE, stated, “The India-UAE economic relationship has evolved into a multifaceted partnership that is reshaping the future of regional and global trade. This highlights how both countries are not just increasing trade volumes but are aligning their strategic goals in key areas like digital innovation, energy sustainability, and infrastructure. This synergy between two of the world’s fastest-growing economies is creating new opportunities, fostering innovation, and building a foundation for long-term prosperity that could serve as a global model for emerging market partnerships. Managing these partnerships will create a stronger and more diverse bilateral relationship, one that is less dependent on traditional sectors and more oriented toward future development. “
The India-UAE trade relationship is experiencing robust growth across several key sectors, reflecting the strategic alignment of both economies. Technology and infrastructure development have become vital growth drivers, with both countries collaborating on projects like the India-Middle East-Europe Economic Corridor (IMEEC). This initiative encompasses railway lines, sea routes, road networks, electricity grids, optical fiber cables, and hydrogen gas pipelines, promising to revolutionize regional connectivity and trade.
Gems and jewelry, traditionally a cornerstone of trade, have seen increased activity under the Comprehensive Economic Partnership Agreement (CEPA). The metals, stones, gems, and jewelry sector is among India’s key exports to the UAE. Additionally, India’s agricultural exports to the UAE, including cereals, sugar, fruits, vegetables, and tea, contribute significantly to the trade basket, helping to address the UAE’s food security objectives.
While the growth trajectory is impressive, challenges like the need for water security in both nations remain critical. To address this, the analysis recommends establishing an International Water Credit Exchange Market, involving governments, the private sector, NGOs, and academia to promote sustainable water management practices globally.
The analysis further highlights the transformative potential of the IMEEC and the India-Israel-UAE-US (I2U2) coalition. These initiatives are expected to enhance efficiency, reduce costs, secure supply chains, and foster transformative integration across Asia, Europe, and the Middle East.