Latest Indian government data shows that the UAE has become India’s fourth-largest investor, a year after the two countries signed a major free trade deal. In the fiscal year 2022-23, foreign direct investment (FDI) from the UAE to India tripled to $3.35 billion from $1.03 billion in the previous year, helping the UAE rise from seventh to fourth position. The UAE primarily invests in services, sea transport, power, and construction activities across India.
Experts attribute the UAE’s increased investments in India to the Comprehensive Economic Partnership Agreement (CEPA) signed between the two countries in February 2022. The trade deal, which came into effect in May 2022, grants zero-duty access to certain goods from both countries and eases investment promotion norms.
The UAE’s rising investments in India reflect the growing economic ties between the two countries. India is already the UAE’s second-largest trading partner and the two countries have set a target of $100 billion in bilateral trade by 2030. The UAE’s investments in India are expected to increase further as the CEPA agreement takes effect and the two countries deepen their economic cooperation.
Singapore was the largest investor in India in the same fiscal year, with investments worth $17.2 billion, followed by Mauritius with $6.1 billion and the United States with $6 billion. From April 2000 to March 2023, the UAE accounted for about 2.5 percent of the total FDI India received, with $15.6 billion worth of overseas inflows.
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