Growing role of Indian state governments in expanding India-UAE relations

The Comprehensive Economic Partnership Agreement (CEPA), which came into effect on May 1, 2022, has significantly boosted bilateral trade between India and the UAE. While in 2021-22, bilateral trade between the two countries was estimated at $72.9 billion, in 2022-23, bilateral trade between India and the UAE was estimated at $84.5 billion; and CEPA aims to increase bilateral trade to $100 billion. Some of the key sectors that have seen growth in India’s exports include gems and jewellery, agricultural products, and automobiles. The UAE’s total direct investment in India is estimated at $17 billion as of September 2023. India’s investment in the UAE is estimated at $8 billion.

UAE Minister of State for Economy Abdulla bin Touq Al Marri, who visited Tamil Nadu with a 30-member delegation to attend the Investopia Global Talks in Chennai, confirmed the growth in trade as well as increase in investment.Several Indian state governments have also approached the UAE and are seeking to avail CEPA. In recent years, several ministers, including Kerala Chief Minister Pinari Vijayan, former Haryana Chief Minister Manohar Lal Khattar, former Odisha Chief Minister Naveen Pattanaik and current Tamil Nadu Chief Minister MK Stalin, have done so.

West Bengal Chief Minister Mamata Banerjee also visited the UAE in October 2023 and highlighted the close economic ties between the two countries. Banerjee met UAE Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoud and a delegation from Lulu Group International.

Several high-level delegations from the UAE have visited India. In January 2024, UAE President Sheikh Mohamed bin Zayed Al Nahyan visited India and attended the Vibrant Gujarat Global Summit.AE’s envoy to India, Abdulnasser Alshaali, has also been working closely with state governments to boost economic linkages. UAE to open its fourth consulate in India in Hyderabad in May 2023

UAE Minister in TN

Abdulla bin Touq Marri met with high-ranking officials, including Foreign Minister Stalin. “Tamil Nadu is one of our largest focus states in the UAE. We are coming with a delegation of over 30 members from the UAE business community, building relationships specifically here in Tamil Nadu, Chennai and the region beyond.”

After the meeting, CM Stalin wrote on Twitter: “…we discussed business and investment partnerships in sectors such as logistics, retail, affordable housing and food processing, with a focus on SMEs and job creation”

Expanding ties The UAE’s economic and people-to-people ties have grown significantly in recent years and are no longer confined to a specific sphere. Several Indian states are trying to take advantage of the CEPA agreement signed by both countries

India-UAE ties in agriculture

Agriculture is a growing area of ​​cooperation between India and the UAE. The UAE has committed to setting up three food parks in India — in the states of Haryana, Gujarat and Madhya Pradesh — at an estimated cost of $2 billion to address food security concerns, as the two countries have also agreed to set up a food corridor. UAE companies are also showing interest in Indian agri-startups and in setting up an agri-trade platform — Agriota — that will provide Indian farmers with an opportunity to connect with the UAE’s food industry. Maharashtra, a major agricultural state, is seeking to set up a trade corridor with the UAE. Punjab is also pushing for close ties between the UAE and India in agriculture and food processing. Notably, during the recent Lok Sabha election campaign, the issue of greater air connectivity between Amritsar and the Gulf countries was flagged so that Punjab — especially its farmers — could tap into economic opportunities in the Gulf countries.

India-UAE relations are only likely to get stronger as synergies between the two countries grow. Indian state governments are likely to become important stakeholders and the UAE minister’s visit to Tamil Nadu is a strong confirmation of the same. State governments need to leverage the opportunities arising from CEPA as well as the growing synergies between India and UAE in the agriculture sector that will benefit both the countries.

(The author is a New Delhi-based policy analyst affiliated with The OP Jindal Global University, Sonipat, India. Views are personal. He can be contacted at [email protected])