With the resounding call of election season echoing throughout the nation, the curtains draw to a close on the second term of Prime Minister Narendra Modi in India. The period of Modi 2.0 characterized by notable achievements also bore witness to a display of unprecedented challenges, particularly in the realm of foreign affairs.
The tenure of Modi 2.0 was a rapid activity marked by rapid developments and significant events. While the global pandemic of COVID-19 presented an unparalleled test, it was the confrontation with China in eastern Ladakh in May 2020 that dominated India’s foreign policy discussions over the past quadrennium. Amidst these monumental occurrences, diplomatic tension with neighbouring nations such as Nepal and the Maldives added further complexity to India’s external engagements.
Notably, amidst the multifaceted landscape of Indian foreign policy during Modi 2.0, one region emerged as a focal point – West Asia. Modi’s proactive engagement with the region commenced early in his first term highlighted by his historic visit to the United Arab Emirates (UAE) in August 2015, the first such visit by an Indian prime minister in over three decades. Early in his second term, Modi revisited the UAE in August 2019 receiving the prestigious Zayed Medal in recognition of his pivotal role in bolstering bilateral strategic ties.
The UAE retained its status as India’s foremost ally in the region evident in Modi’s seven visits to the nation including his most recent trip in February of the present year, preceding the announcement of elections. The camaraderie shared between Modi and Sheikh Mohamed bin Zayed Al Nahyan (MbZ), the UAE's president, highlighted by their brotherly descriptions has been instrumental in forging India’s deepening strategic alignment with the region.
A Trade Boom: India and UAE Reap Rewards from Landmark Deal
A recent interview with UAE officials reveals a flourishing trade relationship between India and the United Arab Emirates, helped by the signing of the Comprehensive Economic Partnership Agreement (CEPA) two years ago. This agreement has unlocked significant economic opportunities for businesses in both nations.
CEPA's Impact: A 16% Trade Surge
Since the implementation of CEPA, bilateral trade has witnessed a remarkable 16% increase, reaching a staggering $85 billion USD – a jump from $73 billion USD just two years prior. This statistic, highlighted by Ahmed Aljneibi who is the Director of the UAE-India Cooperation and Coordination Office (UICC), highlights the agreement's effectiveness in promoting cross-border commerce.
Jaipur Emerges as a Key Trade Hub
The UAE recognizes Jaipur's vital role in India-UAE trade contributing roughly half a billion dollars annually. Aljneibi expressed the UAE's desire to collaborate with local businesses in Jaipur by nurturing partnerships that benefit both parties. This initiative signifies a strategic shift towards regional trade hubs beyond major metropolitan centres.
Ras Al-Khaimah: A Gateway for Indian Expansion
Txomin Goitia, Director of International Relations at the Office of the Ruler, Government of Ras Al-Khaimah, emphasized the emirate's significance for Indian businesses seeking global expansion. Ras Al-Khaimah's economic investment policies, strategic location, and world-class infrastructure provide immense value for Indian companies.
CEPA: Unlocking Opportunities for Businesses
The UAE-India CEPA offers a plethora of benefits for businesses. It grants greater access to each other's markets, eliminates or reduces tariffs on a substantial portion of products and fosters a fair and open trading environment. Additionally, it enhances market access for service providers across various sectors.
Beyond Tariffs: Addressing Trade Barriers
The agreement goes beyond mere tariff reduction. It tackles technical barriers to trade by ensuring the use of internationally recognized standards for technical regulations. This streamlines trade processes and reduces unnecessary hurdles for businesses.
Strengthening the Partnership
The CEPA also provides support for UAE companies in Indian government procurement tenders. Furthermore, Indian products transshipped through the UAE will be exempt from anti-dumping investigations, nurturing trust and transparency. A dedicated Joint Committee oversees the implementation and potential improvements to the agreement by ensuring its continued effectiveness.
A Look Ahead: A Win-Win for Both Nations
As India and the UAE solidify their partnership, businesses in both countries stand to gain immensely. The CEPA's helpful regulatory framework and enhanced market access pave the way for a prosperous future in bilateral trade. This agreement serves as a testament to the power of economic cooperation and its potential to drive mutual growth.
Strengthening Bonds - The UAE-India Economic Partnership
In the diplomatic realm, relationships between nations are similar to intricate tapestries that have been woven together over time with threads of mutual interest, cooperation and shared goals. Such is the case with the burgeoning partnership between the United Arab Emirates (UAE) and India, a relationship that has evolved into a Comprehensive Strategic Partnership since its formalization in 2017.
Today, the ties between the UAE and India stand as a testament to the power of collaboration, manifesting in various aspects of societal and economic exchanges. One need only look at the burgeoning numbers of tourists traversing between the two nations, the deepening economic interdependence and the proliferation of businesses with dual presence in both countries to measure the strength of this partnership.
A recent milestone in this journey towards deeper cooperation was the signing of the UAE's first-ever Comprehensive Economic Partnership Agreement (CEPA) with India in May 2022. This landmark agreement delivers a new chapter in economic and trade relations by laying the groundwork for enhanced collaboration in various sectors. Particular significance is the Dirham-Rupee Trade Agreement, a hallmark of the CEPA which streamlines cross-border trade transactions between the two nations. Under this agreement, businesses in the UAE and India can conduct transactions in their respective currencies by eliminating the need for cumbersome currency exchanges and reducing transaction costs. This simplification of trade processes not only fosters greater efficiency but also opens doors to a plethora of opportunities for businesses on both sides.
The implications of the Dirham-Rupee Trade Agreement extend far beyond the realm of commerce. By facilitating smoother trade interactions, fosters an environment favourable to deeper engagement and trust between the UAE and India. Moreover, it highlights the shared commitment of both nations to strengthen their bilateral ties and propel their economies towards sustainable growth.
As we look towards the future, the UAE-India partnership holds immense promise. With ambitious targets set for non-oil trade and a commitment to connecting the full potential of their economic collaboration, the two nations are controlled to chart a course towards prosperity and shared success.
In conclusion, the UAE-India Economic Partnership stands as a shining example of the transformative power of cooperation on the global stage. By nurturing and expanding upon the foundations laid over the years, both nations are paving the way for a brighter more prosperous future built on mutual respect, understanding, and shared prosperity.
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