Strengthening India-UAE Economic Relations: Bilateral Investment Treaty and 12th High-Level Joint Task Force Meeting

Mumbai, 7 October 2024** — A new chapter has been written in the story of India-UAE economic relations, beginning with the implementation of the India-UAE Bilateral Investment Treaty and the 12th meeting of the India-UAE High-Level Joint Task Force on Investment (HLJTFI). These developments underline the deepening of economic ties between the two countries, aimed at protecting investments, promoting trade and exploring new avenues for mutual growth.


Renewed Bilateral Investment Treaty: A milestone for investment protection


The India-UAE Bilateral Investment Treaty, signed during Prime Minister Narendra Modi’s visit to the UAE in February 2024, came into force on 31 August 2024. The treaty serves as an important framework for protecting investments and creating a secure environment for investors from both countries. It aims to enhance economic cooperation and provide a solid foundation for bilateral investment flows, ensuring the protection of the interests of businesses.


12th Meeting of the High-Level Joint Task Force Held


The 12th meeting of the India-UAE HLJTFI was held in Mumbai, co-chaired by Shri Piyush Goyal, Minister of Commerce and Industry, Government of India, and His Highness Sheikh Hamed bin Zayed Al Nahyan, Managing Director, Abu Dhabi Investment Authority (ADIA). Established in 2013, the HLJTFI has served as a platform to discuss trade, investment and economic matters, address challenges faced by investors, and identify new opportunities for growth.


During the meeting, the Co-Chairs acknowledged the continued progress in bilateral trade and investment relations, bolstered by the India-UAE Comprehensive Economic Partnership Agreement (CEPA), which enters into force in May 2022. CEPA has been instrumental in boosting trade growth, reducing tariffs on most product lines and creating new channels for cooperation. As a result, non-oil trade between the two countries reached $28.2 billion in the first half of 2024, marking a growth of 9.8% year-on-year.


Key Areas of Cooperation and Strategic Investments


The India-UAE partnership is built on the pillars of innovation, investment, and sustainable development. During the 12th HLJTFI meeting, the two sides reviewed key initiatives, including:


- **Bilateral Trade in Local Currencies**: The integration of payment systems between India and the UAE and the ongoing work on Central Bank Digital Currencies reflect the commitment of both countries to enhance financial connectivity.


- **Virtual Trade Corridor and Bharat Mart**: These initiatives aim to streamline trade logistics and create digital avenues for Indian businesses to connect with UAE markets.


- **Sectoral Investment**: HLJTFI reviewed investment opportunities in renewable energy, green hydrogen, pharmaceuticals, genomics and aerospace. The UAE also expressed interest in India’s fast-growing aviation sector, highlighting potential collaboration in aerospace.


Promoting Sustainable Investment through ADIA’s Presence in GIFT City


One of the key outcomes of the meeting was the announcement of ADIA’s new subsidiary in GIFT City, a world-class financial hub in India. The move highlights the UAE’s commitment to India’s economic growth and reflects GIFT City’s position as a secure, globally recognised financial hub. ADIA’s presence in GIFT City is expected to boost investment flows, providing institutional investors with a strong platform to invest in India’s dynamic markets.


Accelerating Growth through CEPA: A Catalyst for Trade and Investment


The CEPA between India and the UAE has not only helped boost trade but has also had a profound impact on Foreign Direct Investment (FDI). The UAE has emerged as India’s fourth largest foreign investor in 2023, investing $3.35 billion across various sectors, marking a three-fold increase from 2022. On the other hand, Indian investments in the UAE reached $2.05 billion in 2023, surpassing the combined totals of 2021 and 2022. These figures underline the tangible impact of the strategic agreements and the shared vision of the two leaderships.


Looking Ahead: A Vision for Mutual Prosperity


Both Shri Piyush Goyal and His Highness Sheikh Hamed bin Zayed Al Nahyan emphasized the importance of HLJTFI as a platform to address challenges, remove investment barriers and chart a path towards shared prosperity. Discussions during the meeting were not only limited to past achievements but also focused on the strategic agreements signed during the recent visit of His Highness Sheikh Khaled bin Mohammed Al Nahyan, Crown Prince of Abu Dhabi to India. The visit further strengthened the commitment of both countries to explore new investment opportunities in sectors such as energy, artificial intelligence, logistics and food and agriculture.

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