India and the United Arab Emirates are continuously diversifying and reducing the dependency on the hydrocarbon sector. Two-way non-oil trade between the UAE and India is $37.6 billion currently, with very active collaboration in the food and pharmaceutical sector. India provides medicines, medical equipment and agricultural produce to the UAE, which allows it to promote medical and food security.
Among the key tools for establishing these ties has been the Comprehensive Economic Partnership Agreement (CEPA), which came into force in 2022. It reduced tariff barriers, accelerated logistics processes and stimulated increases in exports on both sides. Under CEPA, the vision is to drive the value of non-oil trade to $100 billion per year.
Special emphasis is placed on new areas of cooperation. Cooperation in the field of renewable energy, specifically regarding solar and hydrogen energy development, and also in joint research is important. Healthcare is also becoming another strategic field of interest: common pharmaceutical production facilities and medical clusters creation, as well as technology transfer, are being considered. In addition, the establishment of a system of reciprocal settlements in local currencies (dirhams and rupees) is also in the works. This would reduce dependence on the US dollar and make trade relationships more stable.
For the UAE, enhancing its bond with India will open it to new opportunities in the Middle East and African economies, whereas for India, cooperation with the economy of the UAE will enhance diversification and strengthen their role as a global hub of trade and investment. Given the pace of growth, the UAE and India can develop a new economic corridor that will redefine regional and international trade.
