UAE And India Strengthen Strategic Partnerships For Economic Growth In Key Sectors

The economic partnership between the UAE and India has grown significantly, highlighting a strategic alliance that extends beyond trade to include investment, energy, and technology. This collaboration is evolving into a more integrated economic relationship, with joint projects and deep investment partnerships shaping its future.

Dubai is pivotal in this partnership, contributing 85% of the UAE's non-oil trade with India. In 2023, this trade reached $54.2 billion, up from $36.7 billion in 2019. The Comprehensive Economic Partnership Agreement (CEPA) signed in 2022 has been a major driver of this growth.

According to Dubai Chambers' report during the Dubai-India Business Forum, the UAE was India's third-largest global trading partner in 2024, after China and the US. Imports were valued at US$60.1 billion, while exports stood at US$37.8 billion.

In 2023, Dubai's primary exports to India included precious stones and metals worth $14.65 billion. Other significant exports were machinery, plastics, and aluminum. On the import side, precious stones and metals led at $10.1 billion, followed by electronics and mineral fuels.

The UAE invested $2.9 billion in India during the 2023–2024 fiscal year, ranking as India's seventh-largest investor. This investment underscores the deepening economic ties between the two nations.

India's economy is projected to grow at an average rate of 6.5% annually between 2025-26. This positions it among the fastest-growing major economies globally, driven by government infrastructure investments and rising rural demand.

Economic Growth Prospects

India's economic expansion is supported by three main factors: government-led infrastructure projects, strong agricultural output boosting rural demand, and increased private investment in infrastructure-linked industries.

Inflation is expected to decrease as global commodity prices stabilize and supply chain issues resolve. Consumer price inflation is forecasted to drop to 4.3% in 2025 from 4.9% in 2024.

The outlook for India's manufacturing sector remains positive for 2026-29, particularly in electronics and pharmaceuticals. This expansion supports a favourable economic forecast for the coming years.

With inputs from WAM