India and the United Arab Emirates (UAE) are pushing forward with one of their most ambitious economic initiatives in recent years: the Comprehensive Economic Partnership Agreement (CEPA). The agreement, which came into effect on May 1, 2022, has already reshaped bilateral trade by reducing tariffs on nearly 80 percent of traded goods and providing zero-duty access to 90 percent of Indian exports.
Now, both nations are setting a bold new goal — expanding their non-oil, non-precious metals trade to $100 billion by 2030. The move underscores how both economies are adapting to shifting global trade patterns, especially in the wake of rising U.S. tariffs that are disrupting India’s exports to its top markets.
UAE Foreign Trade Minister Dr. Thani bin Ahmed Al-Zeyoudi recently visited India for high-level talks with Commerce Minister Piyush Goyal and industry leaders in Mumbai. The meetings focused not only on reviewing CEPA’s progress but also on exploring fresh areas of collaboration such as renewable energy, digital infrastructure, supply chain resilience, and healthcare.
CEPA’s Achievements So Far
Since its implementation, CEPA has already generated significant momentum. Bilateral non-oil trade between India and the UAE reached $65 billion in 2024, according to data from the UAE Ministry of Economy. Non-oil exports from India to the UAE alone hit $27.4 billion in the 2023–24 financial year, marking an impressive average annual growth rate of 25.6 percent.
Key sectors driving this surge include:
- Gems and jewelry
- Electrical machinery
- Chemicals
- Smartphones
The agreement has not only boosted trade volumes but has also deepened business confidence on both sides. For India, it has provided an important market to offset some of the shocks created by changing global conditions, particularly the 50 percent tariff hike imposed by the Donald Trump administration on Indian goods entering the U.S.
Impacts on Trade and Economy
The decision to aim for a $100 billion target reflects more than just optimism — it represents strategic adaptation. With the U.S. market becoming more challenging due to tariffs, Indian exporters are looking for alternatives to sustain growth. The UAE, with its role as a trade and logistics hub, offers Indian companies access to Africa, Europe, and Central Asia.
For the UAE, strengthening CEPA with India diversifies its economy away from oil dependency. By deepening ties in sectors like pharmaceuticals, renewable energy, and digital trade, the UAE positions itself as a hub not only for commodities but also for innovation and technology-driven industries.
Another important impact is the resilience of the India–UAE partnership. Despite global turbulence, including geopolitical uncertainties and supply chain disruptions, both countries have shown that CEPA can act as a stabilizing force in regional and international trade.
Commentary
The renewed commitment to CEPA highlights how trade diplomacy is becoming central to India’s global strategy. While India has struggled to maintain momentum in trade talks with Western powers, its proactive engagement with the UAE shows how bilateral pacts can yield fast results.
Business leaders in India, such as Manish Mohan from the Confederation of Indian Industry, have described the UAE as a “gateway to Africa, Europe, and Central Asia.” This view underlines how CEPA is not just about trade between two countries but about creating corridors that link India to wider global markets.
For the UAE, aligning with India strengthens its role as a middle power that bridges East and West. In a world where global supply chains are being restructured, Dubai and Abu Dhabi are keen to become essential nodes in trade flows.
Future Outlook
Looking ahead, the CEPA framework provides significant room for growth, particularly in emerging sectors. Renewable energy cooperation could be a game changer, as both India and the UAE are investing heavily in solar and hydrogen projects. Likewise, digital infrastructure collaboration can boost fintech, e-commerce, and smart technology exchanges.
Healthcare and pharmaceuticals are also emerging as strong pillars of the partnership. As geopolitical challenges threaten global medicine supply chains, India’s pharma sector and the UAE’s logistics expertise could combine to build reliable solutions.
The $100 billion non-oil trade target by 2030 is ambitious, but given the trajectory since 2022, it is within reach. Much will depend on how effectively both sides navigate regulatory barriers, align investment priorities, and capitalize on new opportunities.
At a time when protectionism is rising in the U.S. and Europe, the India–UAE CEPA offers a counter-model: a flexible, bilateral partnership that delivers tangible results in record time. For businesses, policymakers, and workers in both nations, the deal promises expanded opportunities and a stronger cushion against global uncertainty.
