India eyes $100 bn investment after free trade pact with UAE

New Delhi, February 15

India and the UAE will sign a free trade agreement (FTA) at a virtual ceremony presided over by Prime Minister Narendra Modi and UAE Crown Prince Sheikh Mohamed bin Zayed bin Sultan Al Nahyan towards the weekend.

This will be the first FTA to be inked by the Modi government which has criticised previous agreements as being detrimental to its economy and balance of trade.

The government hopes the FTA will lead to the UAE investing more in the National Infrastructure Pipeline, with officials estimating the amount to be $100 billion if conducive conditions are in place.

India and the UAE had planned to sign this pact in January, when PM Modi had planned to visit Dubai. However, the visit was postponed due to the third Covid wave in India. It was then resolved to sign the pact in March. But it has now been advanced to February as both sides are keen on getting their economic partnership going as a prelude to greater cooperation in the new Quad of the West, comprising India, the UAE, Israel and the US.

By year-end, the government intends signing three trade pacts with the UAE (Comprehensive Economic Partnership Agreement), the UK (Enhanced Trade Partnership) and Australia (Comprehensive Economic Cooperation Agreement).

India is also negotiating trade agreements with Canada (CEPA), Israel (FTA), India-Eurasian Economic Union (FTA), European Union (Based Trade and Investment Agreement), and the South Africa Customs Union (FTA). The eight FTAs are intended to give a boost to exports. India has set a target of $500 billion in exports by 2023.

Commerce Minister Piyush Goel recently held talks with UK Secretary of State for International Trade Anne-Marie Trevelyan. New Delhi wants to tie up the movement of professionals to Britain as a quid pro quo for lowering import tariffs in some areas.

Boost to Infrastructure Pipeline

• This will be the first free trade agreement (FTA) to be inked by the Narendra Modi government
• It has criticised previous agreements as being detrimental to its economy and balance of trade
• The government hopes the FTA will lead to the UAE investing more in the National Infrastructure Pipeline

Three more agreements

By year-end, the government intends signing three trade pacts with…

• UAE: Comprehensive Economic Partnership Agreement
• UK: Enhanced Trade Partnership
• Australia: Comprehensive Economic Cooperation Agreement