India-UAE News: The United Arab Emirates, i.e. UAE, has now come to the fourth position in terms of investment in India, after which the Middle East policy of the Modi government is considered a hit. The United Arab Emirates (UAE), with which India implemented a free trade agreement in May last year, has emerged as the fourth largest investor in India during 2022-23, according to government data.
In the last financial year, foreign direct investment (FDI) from the United Arab Emirates to India has tripled from USD 1.03 billion to USD 3.35 billion in 2021-22. These figures are from the Department for Promotion of Industry and Internal Trade (DPIIT), which shows how strong the trade relations between India and the United Arab Emirates are.
The UAE, which was at number seven in 2021-22, has come down to fourth place in the financial year 2022-23, and according to the India policy of the UAE government, UAE is going to invest even more in India in the coming months, including in Kashmir. The shopping complex being built is also included.
UAE Became The Fourth-Largest Investor
The relations between India and the United Arab Emirates have become very strong in the Modi government. The UAE has also changed its policy on Kashmir, while Prime Minister Narendra Modi has also been given UAE’s biggest civilian honour.
Also, Singapore continues to be the largest investor in India, with an investment of USD 17.2 billion in FY 2022-23, followed by Mauritius (USD 6.1 billion) and the US (USD 6 billion).
Rudra Kumar Pandey, partner, Shardul Amarchand Mangaldas & Co, said, according to an Economic Times report, that “the rapid strengthening of bilateral ties and investment cooperation between India and the United Arab Emirates (UAE) can be attributed primarily to India and the strong bilateral ties between the UAE, increased investment commitments from the UAE to India, and the policy reforms adopted to ease trade between the two countries.”
UAE investments in India are mainly in sectors such as the service sector, maritime transport, electricity and construction activities.
Pandey said that one of the important factors for the increase in Foreign Direct Investment (FDI) from UAE is the Comprehensive Economic Partnership Agreement (CEPA) between India and UAE on February 18, 2022 (with effect from May 1, 2022), to be signed.
In addition, Pandey said, “Apart from CEPA, the biggest reason for UAE’s increased investment in India is UAE’s commitment to India. UAE to invest USD 75 billion in Indian infrastructure sector.” In addition, UAE will invest heavily in India in the coming months in the renewable energy sector, and it is believed that UAE may soon overtake Mauritius.
In the coming times, there can be tough competition between the US and the United Arab Emirates regarding investing in India.
FTA Between India and UAE
India and the United Arab Emirates implemented the Comprehensive Free Trade Agreement (FTA) effective May 1 last year. Under the agreement, several goods from both countries are getting zero-duty access to each other’s markets, apart from easing norms to promote investments.
The UAE accounts for about 2.5 per cent of the total FDI received in India between April 2000 and March 2023. During this period, the UAE has invested a total of US$ 15.6 billion in India.
Let us tell you that diplomatic relations were established between India and UAE in 1975 and in August 2015, when Prime Minister Narendra Modi visited UAE. The strategic partnership between the two countries was started.
Subsequently, in January 2017, when the Crown Prince of UAE visited India as the chief guest, the two countries agreed to upgrade bilateral relations to a strategic partnership. And only after this did the business partnership between India and UAE increase.
The combined trade between India and the UAE stood at US$ 52.76 billion in the first nine months of FY 2021-22, targeted to reach US$ 100 billion in the next five years. At the same time, Indian companies have also invested in the tourism, hotel, cement manufacturing, textiles, and engineering products sectors in UAE.
