The UAE and India are forging closer economic and political bonds, aiming to achieve a trade relationship of approximately $100B by 2027.
This week, President Sheikh Mohamed bin Zayed Al Nahyan and Prime Minister Narendra Modi convened to explore the enduring and robust connections between the UAE and India.
The leaders discussed avenues to enhance these relations, promoting progress and prosperity for both nations and their people within the framework of their comprehensive strategic and economic partnership.
UAE-India Trade
During the discussions, both parties highlighted their shared commitment to broadening bilateral relations, particularly in the realms of the economy, energy, technology, climate action, and sustainable development.
They also agreed to exploit all available opportunities to realise the goals of their developmental partnerships.
Sheikh Mohamed acknowledged that the relationship between the UAE and India is not only historic and well-established but also serves as a model for evolving relations based on mutual interests and a strategic partnership.
He observed that both countries are on the correct path to achieving the objectives of their comprehensive economic partnership.
Narendra Modi expressed gratitude to Sheikh Mohamed for his support in fortifying UAE-India relations. He affirmed his country’s dedication to further cultivating and expanding these ties, taking advantage of numerous opportunities to nurture and elevate them in the future.
Following the meeting, the UAE Ministry of Investment signed three Memorandums of Understanding (MoUs) with India, outlining frameworks for the expansion of bilateral investment cooperation in the renewable energy, food processing, and healthcare sectors.
Underscoring the UAE’s robust commitment to supporting the ongoing development of India’s thriving economy, the respective Indian ministries signed the agreements. The Indian economy is expected to grow by 7.3 percent during the current fiscal year.
Economic engagement between the UAE and India is diverse and rapidly expanding, supported by a Comprehensive Economic Partnership Agreement (CEPA) between the two nations that became effective in May 2022.
Between April 2022 and March 2023, the UAE and India conducted bilateral trade totaling $84.5 billion, with expectations that it will reach $100 billion by 2027.
The UAE is also the seventh-largest investor in India, with an estimated investment of $18B in 2023.
The three MoUs are between the Ministry of Investment of the UAE and:
- The Ministry of New and Renewable Energy of India on investment cooperation in the renewable energy sector.
- The Ministry of Food Processing Industries of India on investment cooperation in food park development.
- The Ministry of Health and Family Welfare of India on investment cooperation in innovative healthcare projects.
MoU on Investment Cooperation in the Renewable Energy Sector
Collaboration in investment for renewable energy projects in India, as outlined in the agreement, may extend up to 60 gigawatts.
Aligned with worldwide endeavours to combat climate change, India prioritises transitioning to clean energy. The nation’s objective is to achieve net-zero emissions by 2070 and fulfil 50 per cent of its electricity needs from renewable sources by 2030.
In pursuit of these goals, plans are underway to elevate India’s renewable energy capacity to 500 gigawatts, reduce the emissions intensity of its economy by 45 per cent, and mitigate one billion tons of carbon dioxide. The Indian government estimates that the country’s shift to a low-carbon trajectory will necessitate over $10T in new investments by 2070.
The Memorandum of Understanding (MoU) between the UAE and India concentrates on establishing effective collaboration by fostering connections between public and private organisations. The agreement further suggests introducing incentives to support relevant initiatives and aims to facilitate the exchange of knowledge.
MoU on Investment Cooperation in Food Park Development
Under this agreement, the involved parties commit to developing food park projects and spearheading other initiatives in the food processing sector that contribute to global food security.
The investment collaboration seeks to harness state-of-the-art agritech, clean tech, and renewable energy solutions, symbolising a significant partnership between the UAE and India.
The MoU is centred on creating robust and efficient collaboration through the development of bilateral relationships between public and private organisations. The agreement also proposes introducing incentives to strengthen pertinent initiatives and endeavours to facilitate the exchange of knowledge.
Food Processing Sector in India
Regarded as a “sunrise sector” in India, food processing receives a significant boost from the Mega Food Park Scheme. Launched in 2008 as a key government initiative, the scheme aims to provide modern infrastructure facilities for food processing along the entire value chain.
The initiative extends financial support to both public and private entities for establishing clusters of food processing units, referred to as “food parks.” These parks bring together farmers, processors, and retailers, utilizing advanced climate technology to minimize waste, conserve water, and maximize crop yields. Currently, India boasts 24 operational mega food parks, with several others in various stages of implementation.
India’s food processing sector stands as one of the world’s largest, experiencing an average annual growth rate of 8.3 per cent over the past five years. The sector’s output is anticipated to reach $535B by 2025-2026, playing a pivotal role in the overall growth of the country’s economy.
MoU on Investment Cooperation in Innovative Healthcare Projects
The Memorandum of Understanding (MoU) places special emphasis on precision health, entailing personalised healthcare tailored to an individual’s unique genetic, genomic, or biological composition to promote well-being and optimal health.
Evaluators are considering the establishment of a genomic centre of excellence among the potential projects. The healthcare sector in India, estimated at approximately $372 billion, is driven by factors such as affordable treatment, advanced technology, a wide range of specialties, and access to international markets.
As the world’s most populous country, India prioritises affordable, accessible, and increasingly innovative healthcare, facilitated by a consistent increase in public health expenditure year-on-year, according to Arabian Business.
