World Affairs

India and UAE are likely to sign a free trade agreement 

India and UAE likely to sign FTA

On February 18, India and UAE are likely to sign a free trade agreement. The agreement gives both countries duty-free access to several products from various sectors. 

Prime Minister Narendra Modi would host a virtual summit on February 18 with Deputy Supreme Commander of the UAE Armed Forces and Crown Prince of Abu Dhabi, Sheikh Mohamed bin Zayed al Nahyan. 

Bilateral FTA

A statement issued by the Ministry of External Affairs says the Comprehensive Economic Partnership Agreement is a priority as countries will “discuss bilateral cooperation and exchange views on regional and international issues of mutual interest.” 

Furthermore, UAE has invested nearly $17 billion in India compared to $3 billion in 2014. 

Both countries aim to renew trade to pre-pandemic levels of $60 billion. 

Ministry of External Affairs issued a statement stating, “Both leaders are expected to lay out their vision of the historic and friendly relations between the two countries, at a time when India is celebrating 75 years of its independence as Azadi ka Amrit Mahotsav and UAE is celebrating the 50th anniversary of its foundation.” 

Bilateral trade between India and UAE

The bilateral trade between India and UAE in 2020-21 stood at $43.3 billion. The UAE is India’s second-largest export destination and third-largest trading partner. 

The import driven by oil pushed UAE in balance at $26.7 billion in 2020-21, and exports were at $16.7 billion. 

The India-UAE CEPA aims to make over $115 billion within five years. 

The trade for goods would soar to $100 billion and rise by $15 billion in service. 

An official said, based on anonymity, “The CEPA makes the UAE the preferred partner in the GCC. If a commodity is acceptable to the UAE, then objections to it by other GCC members become less defensible, because with the India-UAE agreement, Indian goods will flow to the other GCC countries as the UAE has no customs barriers.”

“The finalization of the agreement in record time — we have negotiated this in four times — shows that where there is a will, there is a way. India can negotiate FTAs. With this, we can even relaunch the GCC free-trade agreement (FTA) negotiations. This FTA with the UAE becomes a template for the GCC.” 

UAE investing in the Union Territory of Jammu and Kashmir

A statement from MEA said, “Both sides had agreed on an Air Bubble Arrangement in 2020 during the pandemic which has enabled the movement of people between two countries despite the challenges posed by Covid-19.”

Furthermore, the UAE hosts large Indian communities of close to 3.5 million. 

Moreover, the MEA statement highlighted that UAE had portrayed interest in investing in the Union Territory of Jammu and Kashmir. 

The Indian Army Chief visited UAE in December 2020, and the Chief of Air Staff visited UAE in August 2021. 

India has also significantly participated in IDEX and NAVDEX 2021 exhibitions in Abu Dhabi. 

The UAE has helped in the overflight of Rafales from France to India, according to a statement from MEA. 

India’s FTA’s with other countries

While the GCC has signed FTAs with European Free Trade Association with Norway, Lichtenstein, Norway, Switzerland, and Singapore, India is negotiating other FTAs with the EU, Australia, Canada, Israel, and the UK. 

Last April, the Modi government signed a similar pact with Mauritius. Furthermore, the agreement signed with UAE is the second FTA. 


Arindam Bagchi, an MEA spokesperson, told ANI, “The India UAE virtual summit on 18 February is an important event. India and the UAE have deepened and transformed their bilateral ties significantly over the past few years. We have made substantial progress on some aspects of the free trade agreement.” 

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Johannah is a passionate traveler. She is seeking remote places across India and exploring the benefits of being a Nomad. She has completed her bachelor's in Psychology Hons and diploma in Graphology. Being able to write helps her to share her experiences and be independent to travel anywhere.

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