India and the United Arab Emirates (UAE) unveiled their bold plan to boost non-petroleum bilateral commerce to $100 billion by 2030 on June 12, 2023. This historic agreement between the two nations denotes a strengthening of economic ties and opens the door to greater cooperation in several industries. Trade and investment have been important pillars of the long-standing bilateral relationship between India and the UAE. Their economic cooperation has historically been dominated by the trade in petroleum, but both nations have realised the need to diversify and widen their trade base. The most recent deal intends to promote more trade in industries other than petroleum, creating a more stable and balanced economic partnership.
The agreement’s main goal is to increase bilateral non-petroleum trade between India and the UAE to $100 billion by 2030. This target represents an ambitious objective for both countries and represents a significant increase in the amount of commerce currently experienced. The agreement recognises sectors with strong growth potential and lists several important areas of cooperation to accomplish this goal.
- Infrastructure Development: The UAE’s competence in construction and real estate complements India’s quick expansion of its infrastructure. Collaboration on infrastructure initiatives, such as those involving ports, airports, and smart cities, gives profitable chances to increase trade.
- Information Technology: The UAE’s ambition to establish itself as a regional technological powerhouse and India’s competence in the IT industry foster cooperation in the fields of software development, artificial intelligence, and digital services.
- Healthcare and pharmaceuticals: The UAE’s expanding healthcare sector and India’s position as the “pharmacy of the world” present opportunities for trade growth in medicines, medical devices, and healthcare services.
- Agriculture and food processing: The UAE’s expanding need for food goods can be satisfied by utilising India’s abundant agricultural resources. Trade in this industry can be improved via joint ventures in agriculture, food processing, and cold chain infrastructure.
Despite the enormous potential, there are a number of issues that must be resolved in order to reach the $100 billion goal.
- Non-Tariff Barriers: It is essential to get rid of or reduce non-tariff barriers such as complicated rules, customs procedures, and certification demands. Smoother trade flows will be made possible by streamlining trade procedures and creating standardised practises.
- Infrastructure bottlenecks: Insufficient transportation and logistics infrastructure may make it difficult for commodities to move freely. To improve connectivity and facilitate trade, investments in infrastructure development, including ports, roads, and railroads, are required.
- Market Access: Both nations must address difficulties with market access by lowering trade barriers, enabling investment flows, and fostering an advantageous business climate. The identification and resolution of market access issues can be aided through bilateral discussions and trade missions.
- Skill Development and Capacity Building: To fulfil the demands of expanding sectors, it would be crucial to strengthen human capital through skill development efforts. The skill gap can be closed through cooperative educational and occupational training programmes.
The India-UAE pact, which aims to increase bilateral non-petroleum trade to $100 billion by 2030, marks a key turning point in their economic cooperation. The expansion of commerce beyond petroleum creates new opportunities for cooperation that are advantageous to both countries. However, both nations must solve issues with non-tariff obstacles, infrastructure, market access, and talent development in order to meet the ambitious goal. India and the UAE can develop a strong economic relationship that promotes growth, innovation, and mutual prosperity through ongoing cooperation and coordinated efforts.
