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UAE and India develop economic and political ties, target $100bn trade by 2027
Jan 10, 2024

UAE President Sheikh Mohamed bin Zayed Al Nahyan and Narendra Modi, Prime Minister of India discuss ties
 
The UAE and India are developing closer economic and political ties as the two countries work towards a trade relationship expected to reach $100bn by 2027.
 
This week President Sheikh Mohamed bin Zayed Al Nahyan and Narendra Modi, Prime Minister of India, met to discuss the strong, historic ties between the UAE and India.
 
The two leaders explored ways to further these relations to advance the progress and prosperity of both nations and their people, within the framework of their comprehensive strategic and economic partnership.
 
UAE-India trade
 
During the talks, both sides emphasised their mutual commitment to expanding the scope of bilateral relations, particularly in the areas of the economy, energy, technology, climate action, and sustainable development.
 
They also agreed to leverage all available opportunities to achieve the objectives of their developmental partnerships.
 
Sheikh Mohamed noted that the relationship between the UAE and India is not only historic and well-established, but also serves as a model for evolving relations based on mutual interests and strategic partnership.
 
He pointed out that both countries are on the right path to achieving the goals of their comprehensive economic partnership.
 
Narendra Modi expressed his thanks to Sheikh Mohamed for his support in strengthening UAE-India relations. He confirmed his country’s dedication to further develop and expand these ties, capitalising on the numerous opportunities to foster and elevate them in the future.
 
Following the meeting, the UAE Ministry of Investment signed three Memorandums of Understanding (MoUs) with India, setting out frameworks for the expansion of bilateral investment cooperation in the renewable energy, food processing and healthcare sectors.
 
The agreements were signed by the respective Indian ministries, underscoring the UAE’s strong commitment to supporting the continued development of India’s prospering economy, which is estimated to grow by 7.3 per cent during the current fiscal year.
 
Economic engagement between the UAE and India is multidimensional and rapidly growing, underpinned by a Comprehensive Economic Partnership Agreement (CEPA) between the two nations which came into effect in May 2022.
 
Bilateral trade between the UAE and India amounted to $84.5bn between April 2022 and March 2023 and is expected to increase to $100bn by 2027.
 
The UAE is also the seventh-largest investor in India, with an estimated investment of $18bn in 2023.
 
The three MoUs are between the Ministry of Investment of the UAE and:
 
  • The Ministry of New and Renewable Energy of the India on investment cooperation in the renewable energy sector
  • The Ministry of Food Processing Industries of India on investment cooperation in food park development
  • Ministry of Health and Family Welfare of India on investment cooperation in innovative healthcare projects
 
MoU on investment cooperation in the renewable energy sector
 
Investment cooperation in renewable energy projects to be implemented in India under the agreement can reach up to 60 gigawatts.
 
In support of global efforts to tackle climate change, a transition to clean energy is a priority for India.
 
The country aims to achieve net-zero emissions by 2070 and meet 50 per cent of its electricity requirements from renewable energy sources by 2030.
 
As a result, there are plans to increase India’s renewable energy capacity to 500 gigawatts, reduce the emissions intensity of its economy by 45 per cent and reduce one billion tons of carbon dioxide.
 
The Indian government estimates that the country’s shift onto a low-carbon path will require more than $10tn of new investments by 2070.
 
The MoU between the UAE and India focuses on forging effective collaboration by building relationships between public and private organisations.
 
The agreement additionally proposes the implementation of incentives to support pertinent initiatives and aims to facilitate the exchange of knowledge.
 
MoU on investment cooperation in food park development
 
Under the agreement, the parties are committed to developing food park projects and driving other initiatives in the food processing sector that contribute to global food security.
 
The investment cooperation aims to harness cutting-edge agritech, clean tech, and renewable energy solutions, symbolising a significant partnership between the UAE and India.
 
The MoU centres on establishing robust and efficient collaboration through the development of bilateral relationships between public and private organisations.
 
The agreement also proposes introducing incentives to bolster relevant initiatives and seeks to facilitate the exchange of knowledge.
 
Food processing is considered a “sunrise sector” in India, which is boosted by the Mega Food Park Scheme, a key government initiative launched in 2008 aimed at providing modern infrastructure facilities for food processing along the value chain.
 
The Scheme provides financial support to public and private entities in setting up clusters of food processing units, known as “food parks”, which bring farmers, processors, and retailers together and utilise advanced climate technology to minimise waste, conserve water and maximise crop yields. India currently has 24 operational mega food parks, with numerous others at various stages of implementation.
 
India’s food processing sector is one of the largest in the world, developing at an average annual growth rate of 8.3 per cent in the past five years.
 
The output of the sector is expected to reach $535bn by 2025-2026.
 
The industry is expected to play a vital role in the overall growth of the country’s economy.
 
MoU on investment cooperation in innovative healthcare projects
 
The MoU lays special emphasis on precision health, i.e., personalised healthcare based on a person’s unique genetic, genomic, or biological composition to help achieve well-being and optimal health.
 
The development of a genomic centre of excellence is being evaluated as one of the possible projects under the MoU.
 
The healthcare sector in India is estimated to be around $372bn. Factors such as affordable treatment, advanced technology, a wide range of specialties as well as access to international markets have accelerated the growth of this industry.
 
As the most populous country in the world, India has made affordable, accessible and increasingly innovative healthcare a priority, facilitated by increased public health expenditure year-on-year.
    
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