(Bloomberg) — India and the United Arab Emirates have completed talks for a wide-ranging economic pact aimed at boosting trade and investment, the Indian government said on Wednesday.
The announcement comes days after the UAE signed a similar pact with Turkey in a push to deepen ties with fast-growing economies. The oil-rich Gulf state is seeking to burnish its reputation as a global hub amid deepening regional competition with Saudi Arabia. India wants better links to revive its economy after the pandemic.
“Negotiations for CEPA were launched in September 2021 and have been completed. The agreement will take India-UAE economic and commercial engagement to the next level,” a statement issued by India’s Ministry of External Affairs said.
India’s Comprehensive Economic Partnership Agreement (CEPA) with the UAE is seen as a springboard for moving further on negotiating trade agreements with other Gulf Arab nations. The Modi government also views the deal as a gateway to Africa via the UAE, its third-largest trade partner.
Total trade between India and the UAE stood at $53 billion during April-Dec. 2021-22. Imports stood at $33 billion while exports at $20 billion during the period.
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Prime Minister Narendra Modi and Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed al Nahyan are scheduled to hold a virtual summit on Feb. 18 to discuss bilateral cooperation and exchange views on regional and international issues of mutual interest, the statement said.
Indian nationals make up one of the largest population groups in the UAE, a major source of foreign remittances. India is also an important market for two-way tourism and UAE airlines Emirates and Etihad. On a political level, UAE royals helped broker talks between India and Pakistan earlier last year.
Investment ties have deepened rapidly in the lead-up to the agreement. Groups from the UAE, a desert country that relies heavily on imports, committed $7 billion in 2019 to set up a “food corridor” and invest in Indian agriculture, with an eye on food security. Abu Dhabi wealth fund Mubadala invested $1.2 billion in India’s telecommunications provider Jio Platforms in June 2020, and India’s Reliance last year announced an investment of $2 billion in Abu Dhabi’s TA’ZIZ Industrial Chemical Zone.
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