NEW DELHI — Bilateral non-oil trade between India and the United Arab Emirates expanded by 50 percent over the past three years, driven by preferential tariff access granted under their landmark economic agreement, UAE Minister of Economy Abdulla bin Touq Al Marri confirmed in New Delhi.
Speaking at the NDTV World Summit, Al Marri stated that the implementation of the Comprehensive Economic Partnership Agreement (CEPA)—signed in February 2022 and operationalized in May of that year—fundamentally accelerated commercial exchanges between the two nations. The agreement dismantled cross-border duties on thousands of industrial, agricultural, and luxury goods, directly facilitating high-volume private sector engagement across South Asia and the Gulf.
"The trade numbers between India and the UAE have grown significantly," Al Marri told delegates during his address, documenting the rapid commercial scaling achieved since the treaty eliminated longstanding customs barriers. Details of the address were reported in the NDTV summit coverage, highlighting the institutional momentum behind Gulf-India economic integration.
Quantifying The Three-Year Bilateral Expansion
The 50 percent growth metric marks a clear shift in how India interacts with its third-largest global trading partner. Before CEPA took effect, bilateral commerce leaned heavily on raw hydrocarbons, including crude petroleum and liquefied natural gas. The bilateral framework targeted non-oil merchandise specifically to insulate both domestic economies from global energy price volatility.
Under CEPA guidelines, customs duties fell to zero on nearly 90 percent of Indian goods imported into the UAE by value, while India opened tariff lines on 80 percent of UAE products. This tariff reduction schedule produced immediate results for manufacturing centers across Maharashtra, Gujarat, and Tamil Nadu, while bolstering warehousing networks across Dubai, Abu Dhabi, and Sharjah.
Public customs tallies reflect this upward trajectory. In the fiscal cycle immediately preceding the treaty, total bilateral merchandise trade hovered near $60 billion. Following CEPA's deployment, non-oil shipments climbed steadily across precious metals, chemicals, capital machinery, and processed food, advancing the joint goal of reaching $100 billion in non-oil trade well before 2030.
Mechanics Behind Tariff Reduction Schedules
The trade treaty operates on structured tariff cuts designed to balance trade flows while shielding vulnerable domestic industries. India secured tariff relief for key labor-intensive manufacturing sectors that employ millions of citizens, directly lowering retail costs and clearing export hurdles into West Asian distribution networks.
Indian gems and jewellery manufacturers emerged as early winners under the treaty. CEPA granted Indian gold jewellery zero-duty entry into the UAE, dropping from a previous 5 percent tariff rate. In exchange, India permitted imports of up to 200 metric tonnes of UAE gold per year at a 1 percent concessional basic customs duty rate, creating an integrated metals corridor connecting Surat polishing units, Mumbai bullion dealers, and Dubai refiners.
Textiles, apparel, leather footwear, and automotive components also secured duty-free clearance at UAE entry ports. As confirmed in the bilateral trade performance reporting, these systematic duty repeals permitted Indian micro, small, and medium enterprises (MSMEs) to price their products competitively against regional competitors across North Africa and the Middle East.
For the UAE, CEPA opened high-volume routes into the world's most populous market for petrochemical derivates, unwrought aluminium, copper wire, and processed dates. By pairing zero-tariff port access with reciprocal investment protections, the treaty persuaded Emirati sovereign funds and private conglomerates to direct sustained investment toward Indian industrial logistics.
Structural Reforms And Cross-Border Settlement Systems
The trade surge stems from institutional regulatory agreements rather than single commercial contracts. Over the past 24 months, India's Reserve Bank and the Central Bank of the UAE integrated national financial infrastructure to simplify cross-border payment reconciliation.
In July 2023, both monetary authorities launched the Local Currency Settlement (LCS) system, allowing bilateral traders to invoice and settle export-import transactions in Indian Rupees (INR) and UAE Dirhams (AED). This system removed third-currency exchange frictions—typically involving the US Dollar—cutting conversion overheads by 1 to 2 percent on commercial consignments.
Both central banks also linked India's Unified Payments Interface (UPI) with the UAE's Instant Payment Platform (AANI), alongside tying domestic card networks RuPay and Jaywan. These combined monetary protocols lowered foreign exchange fees, accelerated wire settlement timelines, and enabled small commercial vendors in both countries to process transactions without correspondent banking bottlenecks.
Indian commercial logistics firms also utilized UAE commercial platforms, including the Jebel Ali Free Zone (JAFZA) and the Abu Dhabi Global Market, as re-export launchpads. Cargo landed in UAE free zones now moves into sub-Saharan Africa, Central Asia, and Eastern Europe with streamlined customs processing, allowing Indian exporters to bypass regional shipping hurdles.
Strategic Reorientation In Gulf Economic Diplomacy
Al Marri's public review in New Delhi reflects broader shifts within Gulf Cooperation Council (GCC) economies. The UAE has deliberately pursued bilateral free-trade accords under its comprehensive foreign trade agenda to secure downstream manufacturing partnerships, diversify national revenue away from fossil fuels, and build regional supply chain hubs.
India serves as a natural anchor for this policy. New Delhi requires stable inputs of industrial polymers, base metals, and fertilizer components to sustain its domestic infrastructure initiatives. Concurrently, the UAE relies heavily on Indian agricultural output, including basmati rice, bovine meat, fresh fruits, and marine products, to safeguard domestic food reserves.
Trade analysts point to CEPA as the template for India's wider trade strategy. New Delhi has referenced the UAE agreement while pursuing updated terms with Australia, the European Free Trade Association (EFTA), and the United Kingdom. As analyzed by the NDTV diplomatic and commercial desk, the pact verified that bilateral trade deals could be negotiated quickly—taking just 88 days from start to signing—and deliver measurable commercial gains within three years.
Strategic foreign direct investment has accompanied merchandise volume. Emirati sovereign wealth entities, including the Abu Dhabi Investment Authority (ADIA) and Mubadala, expanded direct funding into Indian commercial real estate, highway developments, renewable solar installations, and digital platforms. Simultaneously, Indian technology firms expanded their engineering footprints within Dubai Internet City and Abu Dhabi's Hub71.
Compliance Audits And The 2030 Trade Horizon
Despite the 50 percent jump, trade administrators continue auditing implementation to resolve ongoing compliance issues. Exporters on both sides have requested faster clearance on complex Rules of Origin (RoO) certifications, which prevent third-party goods from being routed through UAE ports to circumvent Indian tariff structures.
Indian customs authorities maintain stringent origin monitoring to ensure products entering through concessional CEPA codes feature genuine value-addition inside UAE factories. Similarly, Indian pharmaceutical manufacturers continue pressing for accelerated approvals from UAE health authorities to expand exports of generic oncology and cardiovascular treatments under the treaty's dual-recognition framework.
Both governments maintain an official target of $100 billion in annual non-oil trade by 2030. Reaching that threshold will depend on growing secondary-tier commerce beyond traditional precious metals, expanding service exports across healthcare and financial technology, and deploying digital trade registries to trim shipment processing times at major ports like Mundra, Nhava Sheva, and Jebel Ali.
Joint monitoring subcommittees established by India's Ministry of Commerce and Industry and the UAE Ministry of Economy are scheduled to convene in the coming quarter for a statutory review of operational tariff lines, non-tariff trade bottlenecks, and pending cross-border investment agreements.
*Contextual Intelligence: Verified sector background corroborated in our coverage on India's Marine Fisheries Face Inshore Crisis Despite Official Data.*
*Contextual Intelligence: Verified sector background corroborated in our coverage on US-Iran Tensions Rise as Trump Issues New Military Warning.*
