India Signs BIT with UAE to Foster Economic Collaboration

Have you ever wondered how strategic forums like the Bilateral Investment Treaty (BIT), Comprehensive Economic Partnership (CEP) and other forums help in fostering the country’s economic growth and how this strengthens the strategic relationship?

Let’s understand this whole scenario with India and UAE examples and learn how this provides a platform for businesses and entrepreneurs to tap the untapped market potential for expansion and diversification of their core base.

With the signing of the bilateral investment treaty, both India and UAE have opened the gate for deepening economic cooperation, development of economic hubs, etc. Additionally, this agreement shows that both countries recognise mutual understanding for partnership and enhancing collaboration in key areas.

India’s Trade with UAE

Let’s start with the trade value of export-import commodities between India and UAE by analysing the last five-year trend.

If you look at the table, you can analysis that in the year 2019, the gap between export-import was not more than a billion USD, but the gap drastically increased after 2020, with the highest-ever gap witnessed in the year 2022 when the export was just USD 31 billion and the import was more than USD 53 billion. The fluctuation in the trend is light on the export-import gap and indicates toward changing market direction after 2023, this change is directly attributed to the signing of CEPA in 2022.

India’s Trade with UAE by Commodity

Further, if we delve deeper to understand the market trend by categorising the top most export traded commodities from 2020 to 2023 till Oct in terms of million dollars. In the year 2020, the highest export commodity was minerals fuels and oils with 3408 million USD and reached 6412 million USD in 2023 till Oct, whereas iron and steel is the only community which fluctuated a lot and witnessed a downward trend from 2020 to 2023 till Oct. Overall, fluctuations in trade values reflecting changes in consumer demand, market conditions affected by covid, geopolitical issues with conflict around the world, and other factors influencing bilateral trade.

If you look at the top imported trade commodities from UAE for the last four years, then Aircraft, spacecraft, and parts, etc. are the only commodities that exhibit substantial growth from 2020 (3 million USD) to 2023 till Oct (1004 million USD), this drastic change suggests potential expansions of business related to the aerospace industry and Infrastructure development or other related sectors in India, whereas the ship, boats etc. shows a downward trend from 2020 to 2023, indicates toward a need of comprehensive policies for overall development of the sector.  

Data on the total trade value of export-import categorised by commodities between India and UAE presents a crystal-clear picture of upcoming market development and the potential growth for the business. Here, are some steps that help in achieving the goal –

Major Agreements Signed during the Meeting

Digital Infrastructure –

• This will help in the exchange of technical knowledge, skills and expertise to enhance digital infrastructure.

Intergovernmental Framework –

• Working on a comprehensive framework for the proposed IMEC project for better coordination

Interlinkage of a payment system

• Synchronizing the transactional payment between the countries.
• This will provide a seamless and real-time connection to payment services.

Strategic Economic Vision

• Both countries signed the Comprehensive Economic Partnership Agreement in 2022.
• Opening of BharatMart which includes, a retail showroom, warehouse, office, and other ancillary facilities for helping businesses.
• Aiming to double non-petroleum trade to USD 100 billion by 2030

Signing agreements for strengthening the economic ties for overall business growth and expansion requires respecting the mutual interest of each country and establishing a well-suited work culture environment so that businesses can grow without facing any problems.