UAE-India CEPA Transforms Trade and Startup Cooperation: UAE Minister of Economy Abdulla Bin Touq Al Marri

Since the entry into force of CEPA between the UAE and India in 2022, trade between the two countries has grown significantly by 16.41 per cent, with the total trade value increasing from $72.87 billion in 2021-2022 to $84.84 billion in 2022-2023, according to data from UAE Minister of Economy A.bdulla bin touq al marri who was recently in Chennai. In a wide-ranging interview with ET Dipanjan Roy ChaudhuryAl Marri mentioned that CEPA has strengthened cooperation to promote startups through the exchange of best practices between accelerators, incubators and other such stakeholders in the ecosystem

How has CEPA affected trade relations between the UAE and India since its entry into force?

The UAE-India CEPA came into effect on May 1, 2022, unlocking a range of benefits for both private sectors. In the first two years since the pioneering agreement came into effect, trade between the two countries has grown significantly by 16.41 percent, with total trade increasing from $72.87 billion in 2021-2022 to $84.84 billion in 2022-2023. India’s major export sectors have witnessed a significant growth post the implementation of CEPA, with India’s exports of gemstones and jewellery, medicines and pharmaceutical products, and fruits and vegetables to the UAE witnessing a significant increase. Indian foreign direct investment in the UAE is also on the rise as 11,000 new Indian companies were registered in 2022, taking the total number of Indian companies operating in the UAE to over 83,000. Both countries are on track to exceed the target of $100 billion in non-oil trade by 2030.

Could you discuss the UAE’s strategy to foster joint startup ecosystems with India?

Collaboration in startups and SMEs is an integral aspect of the UAE-India economic partnership. The establishment of CEPA strengthened this collaboration to promote startups through sharing best practices, by strengthening the relationship between accelerators, incubators and other such stakeholders in the ecosystem. The launch of the ‘India-UAE Startup Bridge’ has made this vision a reality. It is a comprehensive platform that facilitates entrepreneurs and stakeholders from both sides to access information regarding the startup ecosystem in India and the UAE. It aims to facilitate capacity building of incubators, incubation opportunities for startups, collaboration between investment firms in the UAE and Indian venture capital and private equity firms, and support in raising funds and data required to help startups grow into unicorns. This initiative is a key step towards formalizing the collaboration between India and the UAE in building stronger startup ecosystems in both countries through long-term programmes. Strengthening partnerships with India in the startup and SME sector is also one of the key areas of focus during the visit.

What role does supply chain optimization play in food security initiatives in India?

Effective supply chain management is key to ensuring food security by minimizing losses, optimizing distribution, and increasing the resilience and efficiency of food supply chains. As geopolitics changes supply chains, strengthening economic ties between the UAE and India is very much in line with the nearshoring and friend-shoring trends we see among other countries.

How does the UAE-India economic partnership fit into broader global economic trends and challenges?

The strong, multi-faceted and ever-growing trade and economic partnership between the UAE and India is a model of sustainable development and productive global partnerships at a time when some players around the world are turning towards protectionism and isolationism. The UAE believes that partnerships and cooperation are the way forward for the global economy, and our partnership with India contributes to addressing several challenges facing the global economy today, including food security and climate change. It continues to create opportunities for the private sector, leading to job creation and sustainable economic development.

Which renewable energy projects in India are currently attracting the most interest from UAE investors?

The UAE’s commitment to sustainability is clearly visible in its significant investments in renewable energy in overseas markets. In 2022, the UAE’s FDI outflows amounted to almost US$36 billion (AED132.5 billion) for renewable energy projects. Over the past 15 years, we have invested over US$40 billion (over AED147 billion) in clean and renewable energy sources and plan to invest an additional US$160 billion (AED589 billion) over the next three decades on our path to net zero emissions. TAQA UAE owns and operates a 250 MW lignite-fired thermal power plant in Neyveli, Tamil Nadu, India. Masdar’s investment in Hero Future Energies supports India’s goal of achieving 175 GW of renewable energy capacity by 2022, including 100 GW of solar. In addition, a consortium led by UAE-based Mubadala and BlackRock Real Assets has invested 40 billion Indian rupees ($525 million) in a subsidiary of India’s Tata Power to create the country’s most comprehensive renewable energy platform. In addition, earlier this year, the UAE and India signed an agreement to boost cooperation between the two countries in areas such as clean energy, grid connectivity and green hydrogen.