Context : Israel signed a free trade agreement with the United Arab Emirates on Tuesday


  • The UAE agreed to normalise relations with Israel in the U.S.- mediated deal in 2020, the so-called  Abraham Accords that Israel eventually concluded with 4 Arab nations.

Reason Behind FTA and Abraham Accords :

  • Iran Factor
  1. Israel insists that issues emanating from the Iranian nuclear programme are an existential threat for the country.
  2. The UAE and Iran even have a long-status territorial dispute, with Iran’s capturing of the islands of Greater Tunb, Lesser Tunb and Abu Musa a sore issue.
  • Islamism or political Islam
  1. It is a transnational idea frequently backed by the Muslim Brotherhood.
  2. Certain Gulf Arab rulers view Islamism as an existential threat to their dynastic monarchies.
  3. This has caused the formation of an unofficial partnership of conservative Middle Eastern governments.
  • Israel, with its excellent intelligence capabilities, is now being admitted in this unofficial partnership as an accomplice member.

What's in Recent News ?

  1. Aimed at boosting trade among the 2 Middle Eastern nations, Israel has signed a free trade Accord/ agreement with the United Arab Emirates.
  2. This is Israel’s first big trade accord with an Arab state.
  • Key Highlights:
  1. This deal will encourage more Israeli companies to expand their offices in the UAE, especially in Dubai.
  2. This deal would eliminate tariffs on 96% of goods, such as food, agriculture, cosmetics, clinical equipment and medicine.
  3. Experts predict the Comprehensive Economic Partnership Agreement, as the accord is known, would enhance bilateral trade to more than $10bn a year within 5 years.
  4. A critical issue of the deal is enhanced security cooperation against local threats, particularly from Iran and its proxies.
  • Significance of this FTA:
  1. Strengthening relationships whilst creating opportunities.
  2. The free trade zone agreement is expected to bolster bilateral trade, to break down obstacles, to improve new economic opportunities, more than that building significant partnerships.
  3. UAE will get boost up in field of technology products and advanced solutions, where Israel holds a relative advantage
  4. This agreement will also give a boost towards the cooperation, dialogue, togetherness among the 2 Nations.
  • Opportunities for India :
  1. This deal gives India a surprising possibility to play a larger role in a region which is its strategic backyard as India has an excellent relationship with UAE and Israel.
  2. India should restart joint exercises with the UAE, and even Saudi Arabia.
  3. India also can use its good relationship to ensure that any future deal on a regional security framework offers adequate space to Iran.
  4. Recently, China has indicated its willingness to play a bigger role in this region, and is close to both UAE and Israel and, increasingly, Saudi Arabia.
  5. India must make its move before this market and the extended neighbourhood come under the Chinese sphere of influence

Way Forward : 

  1. The deal will play a significant role in establishing peace in the Middle East.
  2. This deal also opens up opportunities for the other countries in the regions to come together and to work together in the direction of peace and development.
  3. For India, this is an opportunity to enhance its strategic relations in this region and also counter China on the global front.
  4. This is also an opportunity for India to move one step forward in the direction of fulfilling its Energy Hunger.