India and the United Arab Emirates (UAE) inked a trade pact, Comprehensive Economic Partnership Agreement (CEPA) during a virtual summit led by the Indian Prime Minister and Crown Prince of Abu Dhabi.


  • The Comprehensive Economic Partnership Agreement is a bilateral trade pact that would cover, over a period of time 90% of India’s exports.It would cover both the goods and services sector.
  • As India’s third largest trading partner after the US and China, the UAE is set to increase its trade with Indian plans to raise it to $100 billion.
  • Strong anti-dumping measures:The Commerce and Industries Minister has said that the deal has strong anti-dumping measures integrated into it which will prevent any country from dumping its products into the Indian market by using the route of the UAE.
  • Rules of origin clauses:the has very strong rules of origin clauses that would disallow any country to export goods to India taking advantage of relaxed tariff on the Indian side.
  • Immediate outputs of the FTA: The FTA would allow goods from UAE, especially the famed dates of UAE to enter India.
    • Zero tariff:Most of the Indian exports similarly would benefit from the “zero tariff” that UAE is expected to grant.
    • Increased visibility of Indian products:This move would allow increased visibility of Indian products in the UAE.
    • The reduction in tariff for Indian jewellery and gems will allow it to enter the UAE in greater volume.


Cooperation during pandemic

  • The two nations cooperated closely during the pandemic, with the UAE committing to the welfare of the 3.5 million strong Indian community living there.
  • Air bubble:The air bubble agreed in 2020 has helped most Indians to return back to employment and business.

Economic cooperation

  • Flow of remittances:India remains a top remittance destination for the UAE and absorbed 33.6% of total outflow in 2021.
  • Investments:The investments from UAE have registered nearly a sixfold increase from $3 billion in 2014 to $17 billion.
    • The groups from Emirates and also investing in a post Article-370 Jammu and Kashmir strengthening India’s position on Kashmir in the community of Muslim nations.

Defence and security cooperation

  • The UAE has held in overflight of the Rafale aircraft from France to India.
  • India has also participated in the IDEX and NAVDEX 2021 exhibitions in Abu Dhabi and Dubai air show in 2021.
  • As non-permanent members, both India and UAE are also coordinating positions in the United Nations Security Council

Energy cooperation

  • A transformation in the dynamics has already been witnessed in terms of energy cooperation with UAE’s participation in India’s strategic reserves and its offer to Indian companies to develop stakes in two oil fields.
  • As the third largest supplier of crude oil and a second largest supplier of LNG to India, UAE is keen on taking energy cooperation to the next level with a focus on renewables.

Cultural relations

  • The UAE has become an oasis of religious harmony in West Asia.
  • A Hindu Temple, a first of its grand nature in West Asia is being built in the UAE.
  • The temple would serve as a symbol of harmony and tolerance in the UAE and its great time with India.

Worlds largest Indian diaspora

  • The Indian expatriate community of 3.5 million is the largest ethnic community in the UAE constituting roughly about 30% of the country’s population.
  • Among Indian states, Kerala is the most represented followed by Tamil Nadu and Andhra Pradesh.

Western Quad

  • The western Quad consists of Israel, India, UAE and the United States.
  • The western quad is marked by the diplomatic breakthroughs between Israel and the UAE which recently hosted Israeli Prime Minister.
  • It is understood that UAE as part of its post pandemic recovery plans is planning to revitalise its trade links with the region from the Mediterranean coast to Turkey on one hand and India and South Asia on the other.
  • USA and the UAE are among the biggest trading partners of India, and Israel is among the top technology support providers for India.
  • All four are connected by currents of security and trade.

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