Overview of India-UAE Commercial Relations

India and the United Arab Emirates (UAE) share a deep-rooted trade relationship that dates back centuries. What began as trade in traditional goods like dates, pearls, and fish has grown into a vibrant and multifaceted economic partnership. The discovery of oil in the UAE in the 1960s and the country’s formation in 1971 marked a turning point, paving the way for rapid economic development and deeper bilateral trade. Over the last decade, the relationship has grown significantly, powered by strong leadership, mutual trust, and a shared vision for prosperity.

The elevation of ties to a Comprehensive Strategic Partnership in 2017 laid the foundation for an even closer economic relationship. From modest trade worth US$ 180 million in the 1970s, bilateral trade has soared to US$ 100.05 billion in FY 2024–25, highlighting the strength and scale of this partnership.

Today, the UAE is India’s third-largest trading partner and second-largest export destination, with India’s exports to the UAE crossing US$ 36.63 billion in FY 2024–25. At the same time, India is the UAE’s second-largest trading partner, with UAE exports to India valued at over US$ 63.42 billion. The trade portfolio includes petroleum products, gems and jewelry, food and agricultural products, textiles, chemicals, and engineering goods, reflecting a well-diversified and resilient trade basket.

Investment cooperation has also become a major pillar of the bilateral relationship. The Bilateral Investment Treaty (BIT) signed in February 2024 and effective from 31 August 2024 reflects a shared commitment to fostering secure and transparent investment environments. The UAE has emerged as the seventh-largest investor in India, with cumulative FDI inflows of US$ 22.848 billion (April 2000–March 2025, DPIIT). These investments cover key sectors such as real estate, infrastructure, energy, private equity, and financial services. UAE’s sovereign wealth funds (SWFs), including the Abu Dhabi Investment Authority (ADIA), have significantly expanded their presence in India, with ADIA recently opening a subsidiary in GIFT City, Gujarat.

On the other side, Overseas Direct Investment (ODI) from India to the UAE stood at US$ 16.54 billion between April 2000 and February 2025 (DEA). Indian companies have established manufacturing units, joint ventures, and service businesses in the UAE, spanning sectors like cement, building materials, textiles, engineering products, consumer electronics, tourism, hospitality, healthcare, education, and retail. Prominent Indian names such as Taj Hotels, BITS Pilani, Zee Entertainment, Ashok Leyland, Mahindra, and Dabur have a strong presence in the UAE. Leading infrastructure firms such as L&T, ESSAR, Punj Lloyd, and Engineers India Ltd. have delivered major projects. Additionally, several Indian public and private sector banks operate in the UAE, supporting trade finance, remittances, and diaspora needs.

A landmark in bilateral economic cooperation was the signing of the India-UAE Comprehensive Economic Partnership Agreement (CEPA) on 18 February 2022, during a Virtual Summit between Hon’ble Prime Minister Shri Narendra Modi and H.H. President Sheikh Mohamed bin Zayed Al Nahyan. The CEPA came into force on 1 May 2022, ushering in a new era of trade facilitation, reduced tariffs, and expanded market access for businesses on both sides.

In July 2023, the two countries advanced financial cooperation further by signing a Memorandum of Understanding (MoU) to establish a Local Currency Settlement System between the Reserve Bank of India and the Central Bank of the UAE, enabling trade in Indian Rupees and UAE Dirhams. Efforts are also underway to integrate India’s Unified Payments Interface (UPI) with the UAE’s AANI instant payment platform, and to interlink domestic card networks—India’s RuPay and the UAE’s JAYWAN—to enable seamless cross-border transactions.

The India-UAE partnership continues to evolve and expand into new and emerging sectors. These include Artificial Intelligence (AI), Fintech, innovative healthcare, renewable energy, critical minerals, and civil nuclear cooperation—areas that are essential for the sustainable growth of both nations and the wider region.

Looking ahead, the India-UAE commercial relationship has grown into a strong and successful partnership based on mutual trust, shared interests, and long-term commitment. With strong support from both governments, increasing trade and investment, and growing cooperation in new areas like technology, energy, and healthcare, this partnership is set to grow even stronger in the coming years. The future of India-UAE economic ties is bright, forward-looking, and full of opportunity.