UAE Investors Pledge $25 Billion to Indian Economy Amid CEPA Expansion

Union Minister of Commerce Piyush Goyal announced that UAE investors have expressed interest in investing an additional $25 billion in India. Bringing the total investment to $100 billion, as part of the Comprehensive Economic Partnership Agreement (CEPA). The announcement comes after the 14th meeting of the High-Level Joint Task Force on Investments.

There, India and the UAE discussed investments, trade facilitation, taxation, logistics, energy, market access, and financial cooperation.

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According to Goyal, the UAE has invested $25 billion in India, making it the seventh-largest source of foreign direct investment. The two countries are also exploring the possibility of UAE becoming a more important source of LPG and other energy supplies that India requires.

A study is underway to see whether India can develop subsea pipelines to transport and store gas. Strengthening its energy resilience and security.

India and the UAE are poised to deepen their economic ties with a focus on strategic partnerships. The two nations are exploring ways to enhance cooperation in shipbuilding, with modern ports and cutting-edge technology at the forefront. The discussions also touch on innovative solutions in agriculture, logistics, and emerging tech sectors, as well as energy security and fintech.

Bilateral trade between the two countries is also on the agenda. With a growing emphasis on using local currencies – the rupee and dirham – to facilitate transactions.

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Goyal said the High-Level Joint Task Force on Investments had become an effective mechanism to resolve challenges faced by investors and address issues related to the implementation of CEPA. The CEPA is now four years old, and bilateral trade has doubled to $100 billion, Goyal pointed out.

India's trade with the UAE has benefited from the country's fixed currency peg, allowing for seamless bilateral transactions in dirhams. The arrangement has proven efficient, with minimal exchange rate risks. According to Goyal, the option to convert balances into dollars provides a convenient solution for India's trade deficit, enabling periodic dollar conversions.