After success of trade pact, India & UAE now keen on early investment treaty
India highlights opportunities for investments in priority sectors like renewable energy, health, semiconductors and asset monetization
Expressing satisfaction at the impact of the Comprehensive Economic Partnership Agreement (CEPA), India and the United Arab Emirates have now decided to speed up discussions on the proposed India-UAE Bilateral Investment Treaty.
This was discussed at the 11th meeting of the UAE-India High Level Joint Task Force on Investments held in Abu Dhabi on Thursday (October 5, 2023). The meeting was co-chaired by Abu Dhabi Investment Authority (ADIA) Managing Director Sheikh Hamed bin Zayed Al Nahyan and India’s Commerce and Industry Minister Piyush Goyal.
“The Joint Task Force delegations discussed the status of negotiations for the India-UAE Bilateral Investment Treaty, underscoring the need to accelerate the bilateral discussions for an early conclusion of a balanced agreement that benefits both countries and their investors,” India’s Ministry of Commerce and Industry said after the meeting.
The two sides also discussed ways and incentives for encouraging further growth in investment flows from UAE sovereign investment entities into India. In this context, the Indian side shared opportunities for investments in priority sectors like renewable energy, health, semiconductors and asset monetization sectors in India, the ministry added. At the same time, the meeting also took stock of the progress on the creation of the Fast Track Mechanism to facilitate Indian investment into the UAE.
The co-chairs used the opportunity to review the progress made on the implementation of the Comprehensive Economic Partnership Agreement (CEPA) between the UAE and India, which came into force in May 2022. The CEPA was a landmark agreement designed to spark a new era of cooperation between two nations, strengthening the long-standing cultural, political and economic ties, the Ministry of Commerce and Industry said.
According to the ministry, it has helped reduce tariffs on more than 80 percent of product lines, eliminate barriers to trade and create new pathways for investment and joint ventures. In the first 12 months of the CEPA, bilateral non-oil trade reached US$50.5 billion, representing a growth of 5.8% compared to the corresponding period a year earlier. The two countries are fast moving towards the target of USD100 billion non-oil trade by 2030, the ministry added.
The Joint Task Force meeting also took up the following issues, according to information provided by the Ministry of Commerce and Industry:
Fast Track Mechanism
The two sides discussed progress on the creation of the Fast Track Mechanism to facilitate Indian investment into the UAE. The Indian side requested for strengthening the mechanism especially for facilitation of investments in priority sectors like renewable energy and energy transition. Both sides agreed to use this channel as a means of developing more competitive and accommodating ecosystems that can enable the private sector to fully pursue expansion opportunities in each other’s markets.
India-UAE Start-Up Bridge
Talks also covered the India-UAE Start-Up Bridge, a joint initiative between the UAE Ministry of Economy and India’s Ministry of Commerce and Industry. The bridge is expected to act as a one-stop platform that offers training sessions and knowledge-sharing on important topics such as market access, investment funds, venture capital, incubators and the respective business landscape in each country.
Abu Dhabi – India Virtual Trade Corridor
The Abu Dhabi – India Virtual Trade Corridor aims to increase overall trade volumes by developing data exchange systems to facilitate paperless trade between the two countries, improving efficiencies and security. Both sides agreed to continue coordination and cooperation between the respective counterparties of both countries for the early implementation of this milestone.
Food Security Corridor
The co-chairs also reviewed the progress on key projects including the food security corridor related investment under I2U2 Framework into India. The project will be instrumental in addressing food security challenges, with the aim of bolstering the supply of essential food items and establishing a resilient value chain between the two nations.
Gujarat International Finance Tec-City
The Joint Task Force noted the progress of plans for the Abu Dhabi Investment Authority (ADIA) to establish a presence in Gujarat International Finance Tec-City (GIFT City), a financial free zone in Gujarat, with the aim of facilitating future investments into India. The Indian side invited other Sovereign Wealth Funds in the UAE to establish a similar presence in India.
Cooperation in Industry and Advanced Technology
The Joint Task Force witnessed the signing of an MOU between the UAE Ministry of Industry & Advanced Technology and the Ministry of Commerce & Industry of the Republic of India, related to cooperation in the fields of Industry and Advanced Technology. The MOU will promote cooperation in sectors such space, healthcare, renewable energy, artificial intelligence, among others. The two sides aim to develop cooperation efforts and build an institutional framework to promote and develop bilateral cooperation, bearing in mind the important role that industries and advanced technologies play in the diversification and growth of economies.
National Card scheme for the UAE
An agreement was signed between Al Etihad Payments, a subsidiary of the Central Bank of the UAE, and the National Payments Corporation of India for the creation of a strategic partnership to develop the UAE’s Domestic Card Scheme (DCS). The UAE DCS is a key element of the Central Bank of the UAE’s Financial Infrastructure Transformation programme which aims to position the UAE as a global leader in digital financial infrastructure. The DCS will be the nation's first unified, secure, and efficient card payment platform, accelerating the UAE’s transition to a digital economy by facilitating the growth of e-commerce, providing consumers with a customised offering, enhancing financial inclusion, and reducing the cost of payments.
The meeting was attended by UAE Minister of Investment, MD & CEO of ADQ Mohamed Hassan Alsuwaidi, UAE Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoudi and Governor of the Central Bank of the UAE Khaled Mohamed Balama.
The Joint Task Force was established in 2013 to promote trade, investment and economic ties between India and the UAE. It has provided an effective mechanism for discussion on opportunities & prospects for investments in both countries as well as resolution of issues faced by investors of the two countries.