New Delhi: A year after India signed a major free trade deal with the United Arab Emirates (UAE), the two countries have agreed to raise the target for trade in non-petroleum goods to $100 billion by 2030. It currently stands at $48 billion.
Commerce and Industry Minister Piyush Goyal and UAE Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoudi Monday concluded the first session of the India-UAE Joint Committee on Comprehensive Economic Partnership Agreement (CEPA).
“Instead of $100 billion (total) bilateral trade by 2030, we have mutually agreed that we should look at non-petroleum bilateral trade of $100 billion by 2030, which means doubling our non-petroleum trade from $48 billion to $100 billion in the next seven years,” Goyal said at a press conference with the UAE minister.
The Joint Committee on India-UAE CEPA is a body formed to review and refine the terms of the free trade deal for effective implementation. The CEPA, which was signed last February, came into effect on 1 May 2022.
According to central government data, in FY 2022-23, bilateral trade between India and the the UAE grew at around 20 per cent, and touched an all-time high of around $84 billion.
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Rupee-dirham trade mechanism
At Monday’s meeting, the two ministers also discussed ideas for settling trade in national currencies — rupee and dirham — instead of dollars, said Goyal.
“There are many opportunities where we can take pathbreaking ideas forward, just as we are taking forward the idea of rupee-dirham trade and the engagement between the UPI (Unified Payments Interface) and UAE companies…,” he added.
The talks come months after reports emerged that Indian refiners were primarily paying for Russian oil purchased via Dubai-based traders in UAE dirhams instead of dollars.
India has been ramping up national currency trade with several countries amid efforts to internationalise the rupee. In March, the government announced that the RBI had permitted banks from 18 countries to settle trade in Indian rupees and their currency.
At Monday’s briefing, Al Zeyoudi also expressed the UAE’s desire to ramp up investments in India.
“We are also keen to pursue more investment opportunities here in India…Last year, the UAE made $2 billion investments in integrated food parks across India, and followed up with the support of 300 MW hybrid renewable energy projects in Gujarat,” he said.
The UAE has emerged as India’s fourth-largest investor with foreign direct investment (FDI) touching $3.35 billion in FY 2022-23, according to data from India’s Department for Promotion of Industry and Internal Trade (DPIIT).
In March, Jammu and Kashmir, which saw its special status scrapped in August 2019, received its first foreign investment from a Dubai-based company for the development of a large-scale shopping and office complex.
(Edited by Richa Mishra)
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