This week has been a historic moment for the UAE and India. By inaugurating the new year with the signing of the Comprehensive Economic Partnership Agreement (CEPA) between the UAE and India, our two countries and peoples have solidified a truth we have known for many years: through increased co-operation, we will continue enjoying the immense prosperity and opportunity that await us as partners.
CEPA is as much an economic partnership agreement as it is a testament to the brotherly relations our two countries have enjoyed since the establishment of our diplomatic relationship in 1972. In fact, the start of our bilateral relations predates our diplomatic engagement, with a history of commerce dating back centuries.
As our ancestors traded goods and traversed the ocean seeking contacts and cultural exchange, they set the stage for the flourishing relationship that we see today. In fact, India – the world’s fifth largest economy – is the UAE’s largest trading partner in terms of exports, comprising $26.8 billion or 10.8 percent of its total exports in 2019. That same year, India was the ninth largest recipient of foreign direct investment from the UAE with an inflow of $51bn. Moreover, the UAE and India signed a Comprehensive Strategic Partnership Agreement in January 2017 to set out an ambitious roadmap for political and economic co-operation.
Now, the UAE is taking bold steps to strengthen its economy and that of the wider region by improving and expanding bilateral relations with key partners. We aim to double the size of our economy in the coming decade and continue to attract some of the world’s top human capital, and foreign trade will be an integral pillar of this development.
The entire world is an open market linked by logistics and the free flow of trade. To further widen these economic channels, CEPA boosts market access and facilitates the movement of talent around the world.
The CEPA model is central to the UAE’s efforts to build our economy over the next 50 years and solidify our position as a global economic hub. It also reflects our aim to further develop partnerships that are mutually beneficial to both the UAE and trade partners that are equally invested in shaping tomorrow’s economy.
As such, CEPA represents a turning point in our country’s economic trajectory. Having recently celebrated 50 years since our founding as a nation, the UAE is now eager to begin the next chapter of international engagement. With India in particular, such co-operation is a logical step forward in building upon our bond. The UAE is already one of the top 10 investors in India, and the agreement will help stimulate our partnership while unlocking the new Asian future and driving progress for the south-south corridor.
What tangible benefits will CEPA offer for businesses and people in our two countries? First, it will trigger increased investment flows, lower tariffs and create enormous new opportunities for key sectors in both India and the UAE, including air transport, environment, investment, digital trade and more.
Second, CEPA will make it easier than ever for small and medium enterprises in our countries to go global by granting them access to new customers, networks and avenues of collaboration. The private sector will benefit enormously from these economic privileges as it remains at the forefront of innovation and economic growth.
Third – and perhaps most incredibly – through CEPA, the UAE and India aim to increase bilateral non-oil trade to over $100bn within five years.
Prior to concluding CEPA, our two countries had already signed a number of key economic agreements to boost trade and investment in recent years, including an Agreement on Avoidance of Double Taxation, an Agreement on the Protection and Promotion of Investment and an Air Services Agreement. These agreements came in addition to the establishment of a joint committee and the UAE-India High-Level Taskforce Group on Investment, which have exerted significant efforts exploring opportunities of mutual benefit and strengthening economic co-operation across industry, commerce, and trade.
Economic co-operation, as embodied by CEPA, forms only one part of the deep friendship that our nations share. Today, millions of Indian nationals living and working in the UAE form a vibrant community that has become an inseparable part of our national fabric. In fact, the Indian diaspora in the UAE makes up the largest expatriate community in the country. More than 200 weekly direct flights connect India and the UAE and ensure our peoples continue to engage in trade, study and tourism.
Through this interaction, we have celebrated each other’s festivals and honoured our respective heritage, practiced our religious traditions side-by-side in harmony and learned about each other’s diverse languages, popular culture, food and families. In 1975, the UAE and India signed a Cultural Agreement that set the framework for cultural co-operation and later led to the development of the Executive Programme for Cultural Co-operation in 2016. The heart of the UAE would not be the same without the immense contributions of its Indian community.
In this vein, we are truly proud of India’s participation in Expo 2020 Dubai under the theme “the future is in India.” It is no coincidence that the UAE’s National Day was recently named by UNESCO as World Futures Day, as both our countries look to invest in advanced industries that will reshape our world and enhance prospects for a comprehensive recovery from the Covid-19 pandemic, including through agri-tech, artificial intelligence, green infrastructure and renewables.
The future-oriented vision that our countries share – one of economic prosperity, cultural richness and people-to-people exchange – forms the basis of our enduring partnership, one that will propel us into the next stage. CEPA is only the bright beginning of this coming era of co-operation.