India-UAEA Leap Forward in India-UAE Bilateral Relations: Comprehensive Economic Partnership Agreement

February 22, 20220


A Comprehensive Economic Partnership Agreement (“CEPA”) was entered into between India and United Arab Emirates (UAE) on 18.02.2022 for the purpose of enhancing the historic and friendly bilateral relations between the nations.

Prior to the signing of CEPA, the countries had entered into a Comprehensive Strategic Partnership in 2017, which created ripples of social and economic progress for both the countries. Negotiations for CEPA took place from September 2021, with each country bringing forth their visions for bilateral cooperation and international and regional issues of mutual interest.

India and UAE have historically enjoyed and maintained cordial international relations due to their historic and cultural ties. Currently, UAE stands as the third largest trade partner of India and have collaborated closely with India during the trying times of COVID-19 pandemic for provision of food security and healthcare.

The CEPA is primarily a free-trade pact entered into between India and UAE, inculcating the negotiations for services trade and investment, and prospects for economic partnership. It shall enable free trade by lowering trade barriers, but will not entirely eliminate such trade barriers between the countries.

It symbolizes the common goal of promoting new trade, investment and innovation dynamic in multiple sectors with emerging technologies, such as energy, climate action, FinTech, food security, healthcare and defence and security.

The main focus of CEPA shall be to provide market access to each country, stipulating unique provisions for the same. It also provides for trade facilitation between the countries, through customs cooperation, anti-competitive measures and Intellectual Property Rights protection. Regulatory issues arising in trade between the countries are also suitably addressed by the CEPA.

With the implementation of CEPA, bilateral trade between the countries is expected to rise from USD 60 billion to USD 100 billion in the next five years, and services trade is expected to rise up to USD 15 billion, enhancing the economic opportunities in both nations.


1. Economic Partnership: The CEPA is intended to strengthen economic relations between India and UAE, along with facilitating trade and investment through new avenues. UAE will take steps to promote two-way investments in infrastructure projects, and expedite the establishment of dedicated investment zone for UAE companies and joint ventures focussing on creation of a food corridor.

UAE will also bring forth investment opportunities available to Indian investors for the establishment of specific zones in the Emirate of Abu Dhabi concerned with advanced industrial technology.

2. Tariff Surge Safeguards: The CEPA envisions a permanent safeguard to the exporters of both countries from unwarranted tariff surges in the volumes of most products, excluding certain products stipulated in the exclusion list. Such safeguard mechanisms will be beneficial for businesses engaged in the trade of gems and jewellery, leather, agricultural products, pharmaceutical products, etc.

3. Market Access: Through the CEPA, Indian exporters will have enhanced market access for few sectors including gems and jewellery, textiles, leather goods and software exports, in the West Asia and African regions through UAE, along with utilizing the advanced multimodal transport and logistics infrastructure of UAE. UAE shall also be granted extended market access within India for its key exports including petrochemicals, metals and dates.

4. Energy Partnership: The CEPA envisages and promotes significant investment opportunities for investors of both countries, to amplify and bolster the energy sector tie-ups between India and UAE. UAE, being the first international partner to invest in India’s Strategic Petroleum Reserves Program, will stand by its commitments to provide for India’s growing energy demands.

5. Cultural Cooperation: UAE will lay down the foundations of an Indian-UAE Cultural Council within the country to enable and foster thought leaders of both countries to engage in cross-cultural exchanges, projects, exhibitions and dialogue.

6. Education: Based on the growing demand for innovative and technologically inclined institutions in UAE, the CEPA contains provisions for the establishment of Indian Institute of Technology in UAE.

7. Defence and Security: The CEPA provides for maritime cooperation between the countries, to preserve peace and security in the regions. Provisions for continued exchange of defence tactics, sharing of experiences, training and capacity building are also laid down by the CEPA.


India and UAE have historically enjoyed fruitful bilateral relations, which have enabled socio-economic progress for both the countries. This relation has been strengthened through various bilateral pacts for trade and economic partnership in the recent past, and the signing of CEPA will further reinforce such relations.

The CEPA, being a one-of-a-kind Agreement between India and UAE, and India’s first such Agreement entered into with a Middle East and North Africa (“MENA”) region, will fortify India’s position as a prominent trade and investment destination in the world. Simultaneously, enhanced market access to high skill sectors in UAE will further open corridors for the economic expansion of India and its residents.

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