The trade between India and the UAE has reached an important landmark as bilateral trade between the two countries crosses the threshold of $100 billion under the Comprehensive Economic Partnership Agreement, or CEPA.
The Minister for Commerce and Industry, Piyush Goyal, has pointed out that the pact, which came into effect in May 2022, has helped in deepening the economic ties between the two countries and opening up new avenues for Indian exporters and businesses. Total bilateral trade in 2025-26 stood at $101.25 billion, slightly higher than $100.03 billion in 2024-25. While growth might be moderate, the fact that the pact has crossed the $100 billion mark in just the second year suggests that it is already solidifying and gaining permanency.
Beyond being a trade pact, the CEPA is becoming something much larger. The government sees it as a gateway for India to expand to other global markets-particularly across Africa, the GCC, the wider Middle East, the Commonwealth of Independent States (CIS) region and even parts of Europe. This is because modern trade deals are less about tariff reduction and more about smooth supply chains, deeper market access and the ability of businesses to leverage a key strategic partner to penetrate multiple other markets.
With the UAE’s strategic location, ports, logistical capabilities and a business-friendly environment, it presents an ideal commercial bridge for Indian businesses.
The non-trivial takeaway from the latest trade figures is that the relationship is widening and becoming more diversified. Trade is not restricted to traditional items for India with the UAE anymore; areas like gem and jewelry, engineering goods, electronics and agriculture are witnessing considerable growth.
This is significant for regular readers as it reflects the rising profile of India’s production and farm exports. As engineering goods and electronics compete side-by-side, it points to Indian industries having free play across the global markets. Enhanced farm exports would translate to a boost for farmers, food processors and the country’s domestic supply chains. Simply put, the uptick in trade figures is about more than just numbers; it directly correlates to jobs, manufacturing output and overall business confidence in India.
However, one important point emerging from the figures is that India continues to run a significant trade deficit with the UAE. In 2025-26, India’s exports to the UAE increased by about 2% to $37.36 billion, while imports jumped by 0.77% to $63.89 billion.
This translated to a negative trade balance of $26.53 billion. While a trade deficit isn’t always a sign of a weak relationship, particularly given that the UAE exports high-value commodities such as energy-related products, gold and critical raw materials which India requires, it is indicative of the immediate need to further ramp up exports from India and also to move towards higher-value exports. The challenge ahead is how to accelerate not just the volume, but also the quality and value of trade between the two countries.
Investment is another key part of the Indo-Emirates economic narrative. The UAE made a total foreign direct investment (FDI) of $2.45 billion into India during April-December 2025-26. This represents a decrease from $4.34 billion in 2024-25, and while it shows trade figures are robust, investment trends will need greater attention. FDI is crucial as it not only represents a deeper commitment and a stronger long-term economic relationship, but also contributes significantly towards infrastructure, manufacturing, logistics, real estate, fintech, energy projects, and other key areas. Trade is one dimension of the relationship; investment forms the other, helping build a stable foundation for the future.
All in all, the $100 billion mark should be seen as tangible proof that the India-UAE CEPA is indeed working and bringing benefits to India’s trading profile both locally and globally. The agreement has boosted trade growth in key sectors and expanded access to critical markets through the UAE.
The latter will become increasingly critical, as India will be pressured to grow its exports faster, attract higher-value investments and use the CEPA not just as a trade pact, but as a tool to manage economic impacts moving forward. For a country aiming to be a global manufacturing and export hub, it has become a necessity as much as a benefit.
