The Busy Brains
12 Jun 2023
The United Arab Emirates (UAE) has become the fourth largest investor in India, with foreign direct investment (FDI) witnessing a significant surge. Strengthened bilateral ties and investment cooperation, along with the Comprehensive Economic Partnership Agreement (CEPA), have fueled this growth. Discover the sectors attracting UAE investments and the commitment to invest $75 billion in India's infrastructure and renewable energy sectors.
According to the latest government data, the United Arab Emirates (UAE) has emerged as the fourth largest investor in India during the fiscal year 2022-23. This surge in investments can be attributed to the comprehensive free trade agreement implemented between India and the UAE in May last year.
The Department for Promotion of Industry and Internal Trade (DPIIT) data reveals that FDI from the UAE to India tripled from $1.03 billion in 2021-22 to $3.35 billion in 2022-23. This remarkable increase propelled the UAE from its previous position as the seventh-largest investor to the fourth-largest.
Leading the list of investors is Singapore, with a significant investment of $17.2 billion in FY23, followed by Mauritius ($6.1 billion) and the US ($6 billion).
The growth in investments can be attributed to the strengthening of bilateral ties and investment cooperation between India and the UAE. Additionally, the signing of the Comprehensive Economic Partnership Agreement (CEPA) between the two countries on February 18, 2022, played a crucial role in driving FDI from the UAE. The agreement came into effect on May 1, 2022.
In terms of sectors, the UAE has focused primarily on industries such as services, sea transport, power, and construction activities. The commitment of the UAE to invest $75 billion in India's infrastructure sector and collaborate in the renewable energy sector highlights the long-term partnership between the two nations.
India and the UAE have been operating under a comprehensive free trade agreement since May 1, 2022, facilitating zero-duty access for various goods and relaxed norms to promote investments. From April 2000 to March 2023, the UAE accounted for approximately 2.5% of India's total FDI, amounting to $15.6 billion. Witness the growing investment landscape between India and the UAE, driven by strategic alliances and promising economic prospects.