Next phase of India-UAE ties to focus on new areas related to advanced tech, digital economy: UAE BRICS Sherpa
India and the United Arab Emirates (UAE) are set to expand bilateral cooperation into advanced technology and the digital economy as the next phase of their strategic partnership, building on the trade gains already delivered by the Comprehensive Economic Partnership Agreement (CEPA).
Bilateral trade between India and the UAE has crossed USD 100 billion for a second consecutive year, with both countries setting a target of USD 200 billion by 2032.
With tariffs already eliminated on roughly 97% of trade lines under CEPA, further trade growth is expected to come from services, technology and the digital economy rather than additional tariff cuts.
The remarks were made in the context of UAE's engagement as a BRICS member, alongside continuing bilateral consolidation of India-UAE ties.
India-UAE Comprehensive Economic Partnership Agreement (CEPA)
CEPA is a wide-ranging preferential trade agreement — broader than a standard Free Trade Agreement (FTA) in scope — covering trade in goods, services, investment, government procurement, intellectual property, and digital/e-commerce provisions, rather than tariffs alone.
The "next phase" framing explicitly builds on CEPA's demonstrated trade impact, using the treaty's tariff liberalisation as the base from which cooperation is now expanding into non-tariff areas like technology and digital services.
Bilateral Trade Target and Diversification Toward Services/Digital Economy
Beyond merchandise trade, India-UAE economic cooperation is increasingly weighted toward services, fintech, artificial intelligence, and digital public infrastructure — areas less amenable to further gains through tariff schedules since most goods trade is already liberalised under CEPA.
Key Details
- Both governments have set a bilateral trade target of USD 200 billion by 2032, roughly double the current ~USD 100 billion level.
- Cooperation areas cited for the next phase include artificial intelligence, fintech, sustainability, health-tech and start-up ecosystem linkages, alongside continued goods trade.
- The UAE has also committed significant investment pledges into India (e.g., food-park and infrastructure investment commitments made through UAE sovereign and private capital), reflecting the investment chapter of CEPA operating alongside the trade chapter.
This bridges to the standard UPSC angle on trade agreements evolving beyond tariff elimination into services/investment/digital trade — testable as a distinguishing feature of "new generation" trade agreements like CEPA versus traditional goods-only FTAs.
I2U2 Grouping (India-Israel-UAE-USA)
I2U2 is a minilateral, non-treaty economic and technology cooperation grouping involving India, Israel, the UAE, and the United States, formed to identify joint investment projects in areas such as water, energy, transportation, space, health, and food security.
Key Details
- I2U2 was initially convened as a virtual ministerial grouping in October 2021, emerging in the diplomatic context following the 2020 Abraham Accords (UAE-Israel normalisation).
- The first I2U2 leaders' summit was held virtually on July 14, 2022.
- A flagship I2U2 initiative involves a UAE-backed USD 2 billion investment in integrated food parks in India, incorporating climate-smart agricultural technology.
- I2U2 is not a formal treaty alliance; it functions as a flexible, project-based cooperation platform, similar in spirit to other minilateral groupings India participates in (e.g., the Quad).
I2U2 illustrates how India-UAE bilateral technology and investment cooperation (the subject of this news) is also being pursued through minilateral platforms that bring in additional partners and private capital, beyond the strictly bilateral CEPA track.
- India-UAE CEPA signed: February 18, 2022; entered into force: May 1, 2022
- CEPA tariff line coverage: ~97% of tariff lines by India, ~90% by UAE
- Bilateral trade (FY 2025-26): crossed USD 100 billion for the second consecutive year
- Bilateral trade target by 2032: USD 200 billion
- I2U2 grouping formed: October 2021 (ministerial); first leaders' summit: July 14, 2022
- I2U2 members: India, Israel, UAE, United States