E-Paper
Sign In
CEPA powers UAE-India trade beyond $100 billion milestone
Landmark trade pact has strengthened economic ties, boosted investment flows, and accelerated progress towards a $200 billion bilateral trade goal by 2032
- PUBLISHED: Tue 18 Aug 2026, 11:22 AM
The UAE and India have rapidly expanded their economic partnership since the launch of the Comprehensive Economic Partnership Agreement (CEPA) in 2022, with bilateral trade exceeding $101.25 billion in FY2025-26 and a shared goal of reaching $200 billion by 2032, experts say.
Leading analysts and industry specialists said CEPA has played a pivotal role in strengthening economic ties between the UAE and India. By reducing trade barriers, enhancing market access, and facilitating investment flows, CEPA has accelerated bilateral trade and created new opportunities for businesses in both countries.
Recommended For You
“With both nations committed to deepening their partnership, the agreement serves as a key driver for achieving the ambitious target of $200 billion in bilateral trade by 2032, further reinforcing the UAE and India as strategic economic partners,” according to experts.
They added that the agreement has fostered a more business-friendly environment, driving growth in both traditional and emerging industries while accelerating efforts to deepen trade, investment, and broader economic cooperation between the UAE and India.
Cepa Drives Bilateral Trade
Pankaj Mundra, Chairman 360tf Capital, said the UAE-India CEPA has already delivered strong results, with bilateral merchandise trade crossing $100 billion in fiscal year 2024-25, up from around $ 73 billion before CEPA, reflecting the strength of the economic partnership. The next phase, however, should be about creating integrated value chains, strengthening investment flows and building long-term industrial partnerships rather than simply increasing trade volumes.
“India offers manufacturing scale, engineering talent and digital innovation, while the UAE provides world-class logistics, global capital and strategic access to markets across the GCC, Africa and Europe. Together, they can build resilient regional supply chains rather than traditional buyer-seller relationships,” Mundra told Khaleej Times.
One area with immense potential is logistics. The UAE recorded approximately Dh3 trillion ($817 billion) in non-oil foreign trade in 2024, making it one of the world's leading trade and re-export hubs. Likewise, food security presents a natural opportunity, with India's agricultural and food-processing sector complementing the UAE's long-term food security strategy through investments in cold-chain infrastructure, warehousing and integrated supply chains.
“To fully realise these opportunities, governments should continue reducing non-tariff barriers, harmonising product standards, accelerating customs digitisation and expanding local currency settlement and digital trade infrastructure. Businesses, meanwhile, should move beyond tariff benefits by establishing regional distribution hubs, pursuing joint ventures, investing in manufacturing and integrating trade finance into their expansion strategies.”
Ultimately, he said the success of CEPA will not be measured only by higher trade volumes, but by greater cross-border investment, technology collaboration, stronger MSME participation and the creation of globally competitive value chains.
Shailesh K. Dash, Founder of Dash Venture Labs, bilateral trade has already crossed $100 billion, more than doubling since CEPA took effect in 2022, with officials now targeting $200 billion by 2032. But with tariffs already eliminated on roughly 97 per cent of trade lines, further growth won't come from more tariff cuts — it will come from services and the digital economy, where India-UAE trade still lags far behind goods trade.
“The clearest untapped sectors are fintech, AI and deep-tech, healthcare, pharma, agri-tech, and logistics infrastructure — all flagged repeatedly under what officials are calling ‘CEPA 4.0’. The real gap is regulatory rather than tariff-related: unresolved data-localisation and cybersecurity-compliance rules are holding back Indian SaaS and fintech exports, and professional-mobility and mutual recognition frameworks remain underdeveloped,” Dash told Khaleej Times.
He said governments need to fast-track digital-trade classification rules and scale settlement/logistics infrastructure like the Virtual Trade Corridor; businesses need to shift from goods arbitrage toward building actual services delivery capacity in-market, and toward co-investment rather than pure export.
Rajeev Nanda, FCA Partner, Internal Audit & GRC, Crowe UAE, highlighted some areas that have potential to record good growth in the bilateral trade under UAE-India CEPA, apart from continuous expansion in traditional merchandise:
1. Logistics related lines including warehousing, distribution, re-export, bonded logistics e-commerce etc.
2. Services sector including fintech,
3. Investment activity including both sides – UAE investing into India and Indian firms investing into setting up business and production hubs in UAE for local consumption and for re-export.
4. New emerging areas like Sustainability related services, Fintech, AI and advanced computing, defence and aerospace
Potential Growth Sectors
Mundra said the next phase of CEPA will be driven by sectors where the strengths of India and the UAE are highly complementary. Advanced manufacturing will remain one of the strongest growth drivers, particularly in electronics, electric mobility, medical devices and engineering products.
“The UAE is already India's 8th largest investor, with cumulative investments of approximately $18 billion, while Indian investments in the UAE are estimated at $85 billion, creating a solid foundation for deeper industrial collaboration,” he said.
Logistics and supply chain infrastructure present another major opportunity. With Dh3 trillion ($817 billion) in non-oil foreign trade in 2024, the UAE has established itself as one of the world's most important logistics and re-export hubs. Indian businesses can leverage this ecosystem to expand efficiently into the GCC, Africa and other international markets.
Food security is equally promising. India exported approximately $47.3 billion worth of agricultural and processed food products in fiscal year 2024–25, creating opportunities for UAE investments in food processing, cold-chain logistics, warehousing and integrated agricultural supply chains.
Looking ahead, he said renewable energy, green hydrogen, AI, fintech, healthcare and digital services will emerge as key investment-led sectors. As both countries work towards their shared ambition of $100 billion in non-oil trade by 2030, these high-value industries will increasingly shape the future of the partnership.
“The real opportunity lies not just in expanding trade, but in building integrated ecosystems where manufacturing, logistics, technology and financing work together to create sustainable long-term growth,” he said.
Highlighting sectors that have the most growth potential under CEPA, Nanda said: “We can look at the sectors by classifying them into Mature (gems and jewellery, petroleum and energy, textile and apparel, engineering goods, food and agriculture, chemicals and plastics, pharmaceuticals etc.); Rising (fintech and digital payments, specialised pharma and healthcare, electronics and electrical equipment, logistics and supply chain technology, food processing and agri technology); and Emerging (defence and aerospace, AI and advanced technology, space technology, renewable and clean energy) sectors or industries.
“While in immediate term the mature industries will gain a lot, in the medium term the rising industries will benefit and over the long term the emerging industries will take advantage of CEPA.”
Nanda said additional steps required from the governments and businesses to fully realise the potential of CEPA should include:
1. Setting up relevant business identification Units in both countries to help identify businesses that could benefit from CEPA and facilitating small business to gain advantages under CEPA somewhere along the Bharat Mart lines.
2. Strengthening the governance around CEPA by educating and training relevant players at industry or sector levels and/or on broader levels about basic concepts like Certificate of origin, Rules-of-origin, HS classification, Valuation risks, Tarif rate Quotas (TRQ) governance etc.
3. Businesses to set up CEPA related audit functionality to ensure realising full potential and avoid abuse of CEPA
4. Enhancing the scope of digital trade finance and working in areas of SME credit
Leveraging CEPA for Expansion
Dash said most businesses are under-using three CEPA levers. First, the Certificate of Origin: without it, no tariff preference applies, yet COOs issued under CEPA had crossed only about 8,000 by late 2025 — modest against India's total UAE export base, suggesting many eligible micro SME shipments still pay full duty.
Second, rules-of-origin cumulation is underused: exporters can use partner-country inputs (e.g., UAE-sourced fabric in Indian garments) and still qualify for preferential tariffs, widening sourcing options, but awareness remains low outside trade-compliance circles.
Third, services and professional mobility remain the biggest untapped headroom — CEPA enables mutual recognition of degrees in engineering, medicine, accountancy and more, letting firms operate cross-border in services, not just goods.
On digital trade, Indian fintech and SaaS firms can export under CEPA's Digital Trade chapter, which bans data localisation, though few structure contracts around this yet. Practically, the biggest near-term win for businesses is compliance hygiene: the most common reasons CEPA shipments get rejected at UAE customs are missing origin documents, mismatched HS codes, and unverified certifications — all fixable without waiting on policy change.
Nanda said businesses can better leverage CEPA for expansion by exploring business opportunities in the areas in rising and emerging sectors. Indian firms can also look at setting up integrated production and distribution corridor in UAE to reach Africa and beyond, by partnering with UAE companies.
“The emphasis should also be to broaden the non-oil/non-precious-metal trade base. This will help move CEPA from a tariff-reduction story to a broader trade, investment, logistics technology and supply-chain partnership and achieve the aim of reaching $200 billion mark set for 2032 under this framework,” he said.
Mundra said many companies still approach CEPA primarily as a customs duty concession. In reality, it should be viewed as a strategic business expansion framework.
The first priority is ensuring proper compliance through correct HS classification, Rules of Origin and documentation, enabling businesses to fully utilise preferential tariff benefits while avoiding unnecessary disputes or delays.
Secondly, Indian companies should use the UAE not merely as an export destination, but as a regional headquarters for serving the GCC, Africa and neighbouring markets. Establishing regional warehousing, distribution centres and local partnerships can significantly improve supply chain efficiency and market access.
From a financial perspective, businesses must integrate trade finance, supply chain finance, receivables finance, export credit insurance and foreign exchange risk management into their expansion strategy. In my experience, many businesses lose growth opportunities not because of insufficient demand, but because of inadequate working capital and limited access to trade finance.
Finally, he said businesses should move beyond transactional buyer-seller relationships and focus on joint ventures, technology partnerships and cross-border investments. Companies that combine CEPA's tariff advantages with strong financing, logistics and compliance strategies will be best positioned to build resilient regional businesses and unlock long-term value.
Fintech Role in CEPA-driven Growth
Dash, a leading entrepreneur and veteran of the Mena alternative industry with over 30 years of experience, said fintech is where CEPA's services ambitions have moved fastest from paper to product. India-UAE is the world's second-largest remittance corridor, worth over $20 billion annually and accounting for a third of India's total inward remittances, serving roughly 3 million resident Indians.
“Since 2024, India's UPI has been directly linked to the UAE's AANI payment system, now live across 60,000+ merchant locations in Dubai and Abu Dhabi, alongside DigiLocker cooperation on digital identity and KYC. This isn't just consumer convenience — instant, local-currency settlement reduces dollar-dependency and friction for the broader $100 billion trade relationship, making fintech infrastructure for everything else under CEPA,” he said.
“It's also becoming a template: NPCI has replicated the model with Bahrain, Qatar and Oman, positioning UAE fintech integration as the reference model for a wider India-GCC corridor. The main constraint now is regulatory harmonisation — AML, KYC and cybersecurity standards, plus unresolved SaaS/fintech data-classification rules — rather than technology or appetite,” Dash said.
Mundra said fintech has the potential to become one of the strongest enablers of CEPA by addressing many of the practical challenges businesses face in cross-border trade.
Digital trade finance platforms can provide businesses with access to multiple banks and financial institutions for letters of credit, receivables finance, factoring and supply chain finance, improving access to liquidity and competitive pricing.
Another important development is e-invoicing and digital trade documentation. Greater interoperability between India and the UAE's digital invoicing ecosystems can help authenticate transactions, reduce reconciliation and compliance burdens, and create reliable transaction-level data. Over time, verified e-invoices can also support faster credit assessment and invoice-based financing, particularly for micro SMEs.
Artificial Intelligence can further strengthen this ecosystem by automating document verification, identifying discrepancies in letters of credit and improving compliance and risk assessment.
“The India-UAE Local Currency Settlement (LCS) framework is equally important, enabling eligible transactions to be settled in Indian Rupees and UAE Dirhams and potentially reducing unnecessary currency conversions and settlement friction.
“The next step should therefore be to connect e-invoicing, trade documentation, financing, payments, customs and logistics more seamlessly. For MSMEs especially, such an ecosystem can make cross-border trade faster, more transparent and, most importantly, more financeable,” he said.
Nanda said fintech can become key enabler of next phase of India-UAE CEPA. The areas of fintech play among other areas are: cross-border payments (UPI & AANI platforms are already linked), trade finance innovations and new products and enhancing digital trade finance, applications and software to assist in CEPA Compliance and governance, enhancements in local currency settlement system for Indian rupee and UAE Dirhams, automating and easy availability of supply-chain finance, use of AI in fraud and compliance matters and e-commerce initiatives.
“Fintech advancements could help us reach the CEPA 2.0 version with ease of doing business and better connectivity and automation across all fronts,” he said.
