UAE-India CEPA deal creates more win-win scenarios with each year

May 1 marked the third anniversary of the Comprehensive Economic Partnership Agreement (CEPA) between the UAE and India. The deal was hailed as a strategic economic and diplomatic partnership between the countries.

Much has been written about the agreement, which in terms of its drafting differs from a traditional Free Trade Agreement (FTA), enhancing bilateral trade relations, generating employment opportunities, and boosting economic cooperation.

Accompanying the signing of the trade agreement, a press release by the Indian Ministry of Commerce and Industry emphasised the tangible outcomes from the treaty, noting a surge in trade from $43.3 billion in 2020–21 to $83.7 billion as of 2023–24), with projections to hit $80.5 billion in 2025. The CEPA’s success in non-oil trade has been underscored by a figure of $57.8 billion during 2023–24, while nearly 2,40,000 Certificates of Origin have been issued, correlating with aggregate exports to the UAE of $19.87 billion.

As a method of international cooperation that directly corresponds to technological advancement, trade liberalisation, investment promotion, and integrated economic development within a legal framework, CEPA stands as a blueprint for bilateral engagement. One of the many aspects of the agreement is the mutually beneficial approach to 'exchange information relating to the development of competition policy’, allowing for a tactical removal of structural impediments that have adverse effects on either jurisdiction.

In terms of transfer of knowledge and movement of migrant personnel, CEPA guarantees expeditious grant of visas. This is crucial given that the UAE is currently the most preferred destination for Indian nationals abroad, with over 3.5 million Indians residing in the Emirates as of 2024.

A special issue study published in the scientific journal Healthcare, examining Indian migrant workers from Bihar and Uttar Pradesh, highlighted the socio-economic vulnerabilities they faced during the pandemic. The study reported that India experienced a 17% decline in remittances from the UAE during the peak of the pandemic, underscoring the vital economic role of the diaspora.

More than about straight economic benefits

Noteworthy is the fact that CEPA is not merely an economic mechanism, it is a diplomatic cornerstone that reflects a foundation of shared trust coupled with sustained, exponential growth by virtue of its ties. With the Gulf countries accounting for over 18% of India’s crude oil imports and a cumulative trade volume exceeding $184 billion in 2023, Indo-Gulf relations have matured into a multifaceted partnership.

India’s outreach through CEPA with the UAE also complements its broader ‘Look West’ policy, aiming to integrate regional supply chains and strengthen food and energy security. Additionally, emerging cooperation in fintech, renewable energy, and cybersecurity are redefining the contours of this strategic alignment.

In the fast-changing global landscape, defined by conflict, tariff wars, and supply chain breakages, CEPA has become a beacon of economic collaboration and strong diplomatic alignment.

It exemplifies how bilateral relations can be transformed into a multi-dimensional alliance and how economic cooperation can build on a strategic partnership to create a resilient and dynamic regional order.