With a Focus On The Future

Siddharth Balachandran, Chairman, India Club, talks about the impact of CEPA on UAE-India trade and the changing economic landscape

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Siddharth Balachandran, Chairman, India Club
Siddharth Balachandran, Chairman, India Club

Published: Tue 15 Aug 2023, 11:40 AM

Having established diplomatic relations in 1972, economic synergies between India and the UAE have continued to deepen, with UAE emerging as India’s third largest trade partner in financial year (FY) 2022. The Comprehensive Economic Partnership Agreement (CEPA) between India and the UAE is set to be a template for future trade agreements, boosting investment opportunities between countries and uncovering new avenues for collaboration.

Since its establishment in 1964, India Club has been a safe haven and a 'home away from home' for the Indian expats. Over the years, the organisation has played a pivotal role in sourcing numerous networking and business opportunities. Today, the club continues to thrive and exist as a testament to the strong bonds of brotherhood between the UAE and India.

With some of the most advanced and latest state-of-the-art sports and health facilities, India Club is the largest social club of the Indian diaspora. The membership of the organisation is made up of more than 8,000 and it continues to grow everyday as the club offers a number of activities. These include activities such as sports, entertainment, leisure facilities and a wide array of delicious culinary offerings.

How do you see impact of CEPA on the UAE-India bilateral trade?

The impact of CEPA on the UAE-India bilateral trade exemplifies an exceedingly upward trajectory for many decades to come. If the expectation was that bilateral trade would reach $100 billion in the next five years’ time, then the reality is that in the first-year post CEPA, trade increased from $73 billion to $85 billion. So, it is certainly a pathbreaking development.

India recently signed a deal for using the UAE dirham and Indian rupee in bilateral trade. How do you see this development?

The Indian rupee and the UAE dirham have historically maintained a strong and positively reinforcing relationship, primarily attributed to various significant factors.

One key factor is the robust trade and economic influence between these two nations. The recent shift away from exclusive reliance on the US dollar for trade between India and the UAE is expected to result in notable reductions in transaction and conversion costs. This change is anticipated to naturally amplify trade volume between the two countries.

India economy is the world's growing despite global economic challenges and higher energy prices. How do you see its outlook in short to medium term?

I firmly believe that the current period could potentially be India's defining decade, if not century. The consistently high percentage of growth demonstrated by the nation is truly remarkable. One of the main reasons for this sustained pattern is the volume of human capital along with the quality of each element of the population at large. The manufacturing thrust, the financial markets, the banking system and the regulatory framework are symbols of the robustness of the Indian economy, and this is poised to continue.

Do you see any major challenges for the Indian economy?

The major challenge could be laxity of speed in the implementation of formulated policies.

Also, I am convinced that the legal system needs large scale reforms encompassing all holistic aspects of the country and its economy. While the regulatory bodies exhibit commendable performance, they could benefit from enhanced support in terms of robust policy advocacy procedures, in order to attain a world-class stature. Also, if a coalition government with no perceptible majority is established at the centre, then policy formulation itself becomes quite difficult. So, a strong government with a good opposition is the recipe for a healthy democracy which in turn creates a healthy economic environment.

What do you suggest to the Indian government to facilitate industrialists, investors and traders?

Promptly, there is an urgent need to introduce thorough and comprehensive legal reforms within the relevant framework. Subsequently, careful consideration must be given to the Police Act. Once it is established that the legal and regulatory framework is excellent, then the excellent businesses and business houses will follow. This stands as my primary recommendation.

Which sectors will be growth catalysts for the Indian economy?

In my view, the future of India seems promisingly aligned with the fintech industry. Simultaneously, I believe that well-regulated investment platforms, such as the existing stock exchanges, are rapidly evolving into technologically-driven entities. This sector possesses a certain intangible quality, an ‘X-factor’ that extends its significance not only within India but on a global scale as well. I also feel that the agricultural sector is gaining in traction and will occupy a higher percentage of GDP as time goes on.

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