New Delhi, May 1: The comprehensive economic partnership agreement (CEPA) between India and the United Arab Emirates has emerged as a resounding success story, solidifying the long-standing economic ties between the two sides, UAE ambassador Abdulnasser Alshaali said on Wednesday.
The envoy said there has been a remarkable growth in bilateral trade between the two countries after inking of the mega trade pact.
“The UAE-India CEPA has emerged as a resounding success story, solidifying our nations’ long-standing economic ties and ushering in a new era of prosperity,” Alshaali said.
“Over the past two years, we have witnessed remarkable growth in bilateral trade, a testament to the immense potential that exists when our complementary strengths are harnessed effectively,” he said.
The ambassador was speaking at an event in Mumbai that was hosted to mark the second anniversary of the coming into force of the CEPA.
“The CEPA has not only opened new avenues for businesses to benefit from the bilateral partnership, but has also fostered deeper integration of our economies, paving the way for increased investment flows and collaboration across diverse sectors,” he said.
Following the landmark visit of Prime Minister Narendra Modi to the UAE in August 2015, bilateral relations between the two countries were elevated to a Comprehensive Strategic Partnership.
Both countries signed the CEPA in February 2022 and a Local Currency Settlement (LCS) System in July 2023 to promote the use of Indian Rupee and AED (United Arab Emirates Dirham) for cross-border transactions.
The CEPA came into force from May 1, 2022.
The trade pact provides for numerous benefits, including the elimination and reduction of tariffs, fostering an open trade environment, and enhances market access for service providers across various sectors.
It also addresses technical barriers and provides access to government procurement opportunities.
Major Indian export sectors have benefited considerably since the implementation of the CEPA, with the export of Indian gems and jewellery to the UAE expanding by almost 64 per cent in last two years, according to a statement issued by the UAE embassy in New Delhi.
It said other critical Indian export sectors, such as drugs and pharmaceuticals, and fruit and vegetable products have also recorded considerable growth, increasing by almost 39 per cent and 35 per cent, respectively.
Beyond direct trade, the CEPA has facilitated numerous investment benefits, and a deep sense of confidence and ambition within both the UAE and Indian business communities, it said.
The embassy said the CEPA has been “pivotal” to the development of several economically transformative projects such as Bharat Mart in Dubai, as well as significant investments by major UAE entities into the Indian economy.
The Abu Dhabi Investment Fund’s commitment to establishing a USD 5 billion fund in collaboration with Gujarat’s GIFT City, Mubadala’s acquisition of an eight per cent stake in Manipal Health, and Lulu Group’s strong expansion plans within India’s retail market firmly highlights the mutually beneficial impacts of the CEPA, the statement added.
The establishment of the UAE-India CEPA Council earlier this year further underscores the commitment of both nations to fortify their economic partnership, it said.
“Supported by the UAE and Indian governments, the CEPA Council serves to enhance investment and trade ties, further cementing the dynamic and resilient economic relationship that has been created by the implementation of the CEPA,” it said.
“Looking ahead, partnerships in critical industries such as start-ups, women entrepreneurs, micro, small and medium-sized enterprises (MSMEs), and the services sectors will continue to drive the UAE-India growth story,” it added.
The two countries are among each other’s top trading partners with a bilateral trade of about USD 85 billion in 2022-23, according to official data.
The UAE is also among the top four investors in India in terms of foreign direct investments in 2022-23.
About 3.5 million strong and vibrant Indian community forms the largest expatriate group in the UAE. (PTI)
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