Maarg Manthan · Topic 3.5

India-UAE Relations: Comprehensive Economic Partnership Agreement (CEPA)

International Relations & Places in News › India and Its Extended Neighbourhood · Topic 3.5

India-UAE relations are a Comprehensive Strategic Partnership, upgraded in 2017, with the Comprehensive Economic Partnership Agreement, CEPA, signed in February 2022 and in force since May 2022 as its economic core. Bilateral trade crossed 100 billion US dollars in 2024-25, and during President Sheikh Mohamed bin Zayed's visit to New Delhi on 19 January 2026 the two countries set a target of 200 billion dollars by 2032. The UAE hosts about 3.5 million Indians and is India's gateway to West Asia and Africa.

5 min read · UPSC Prelims · International Relations · India and Its Extended Neighbourhood

At a Glance

Status Comprehensive Strategic Partnership (2017)
CEPA Signed February 2022; in force May 2022
Trade Above 100 billion dollars in 2024-25
Target 200 billion dollars by 2032
Diaspora About 3.5 million Indians
Exam link UPSC Prelims, International Relations: India and Its Extended Neighbourhood

Where Does It Fit?

This is the fifth topic of the macro on India and its extended neighbourhood. The UAE is now India’s closest partner in the Gulf and one of its largest trade and investment partners. Previous topic: India-Saudi Arabia Relations: Strategic Partnership Council. Next topic: India-Africa Relations: India-Africa Forum Summit, Development Partnership.

What Does the CEPA Do?

Background: the India-UAE Comprehensive Economic Partnership Agreement was signed in February 2022 and came into force on 1 May 2022, and was negotiated in about 88 days. It was India’s first major trade agreement in about a decade.
Trade growth: bilateral trade rose from about 72 billion dollars in 2022 to above 100 billion dollars in 2024-25, making the UAE one of India’s top trading partners.
Scope: the agreement removes or reduces tariffs on most goods and opens services, with benefits for Indian gems and jewellery, textiles, engineering goods and pharmaceuticals.
Targets: the January 2026 summit set a target of roughly doubling trade to 200 billion dollars by 2032.
Currency: the two sides have agreed to settle trade in the rupee and the dirham, in addition to a link between payment systems such as UPI.

The earlier trade deals of India are compared in India-Australia Economic Cooperation and Trade Agreement (ECTA) and the broader Gulf negotiation in India-Gulf Cooperation Council (GCC) Countries: Energy Security, Diaspora Remittances.

What Are the Other Pillars of the Partnership?

Pillar	Details
Energy	ADNOC Gas agreed to supply LNG to Hindustan Petroleum, 0.5 million tonnes a year for 10 years from 2028, in a deal reported at 2.5 to 3 billion dollars. The total UAE LNG contracts with India exceed 20 billion dollars
Nuclear	Cooperation was extended to advanced technologies such as large reactors and small modular reactors
Investment	The UAE signed a letter of intent with the government of Gujarat to develop the Dholera Special Investment Region. UAE funds invest in Indian infrastructure, ports and start-ups
Defence	The visit produced defence agreements, and the two sides conduct exercises, such as the Desert Cyclone army exercise
Connectivity	The UAE is a member of the India-Middle East-Europe Economic Corridor and of I2U2 with India, Israel and the United States
People	About 3.5 million Indians live in the UAE, the largest expatriate group, and the UAE is a major source of remittances
Multilateral	The UAE hosted COP28 in 2023 and is a BRICS member, as in BRICS (Brazil, Russia, India, China, South Africa) and BRICS Expansion

What Are the Challenges and the Outlook?

Regional conflict: disruption in the Persian Gulf and Gulf of Oman Between Iran (north) and Oman (south) Narrowest width About 33 km Oil…">Strait of Hormuz and the conflict in West Asia since February 2026 affect shipping, energy and the safety of Indians.
Trade structure: India’s imports of oil, gold and gas make up a large part of trade, and the deficit is a concern, so the target requires more Indian exports.
Non-oil trade: rules of origin and standards need attention so that smaller Indian firms use the agreement.
Labour protection: wage theft and working conditions for Indian workers are recurring issues.
Investment delivery: large investment pledges take time to become projects.

As an analytical point, the UAE is a model of how a trade agreement can build a wider partnership. Trade, energy supply, investment and technology reinforce each other, and the UAE’s role as a hub for re-exports gives Indian firms a platform for Africa and West Asia. The risks come from the regional security environment and from overdependence on energy trade, which is why local-currency settlement and new sectors such as nuclear and digital cooperation matter.

Why Is This Topic Important?

Agreement CEPA dates asked
Targets Trade and LNG
Hub Gateway to Africa

What Came Next?

The next topic covers Africa, where India has long-standing development ties. Next topic: India-Africa Relations: India-Africa Forum Summit, Development Partnership.

Key People and Terms

CEPA Comprehensive Economic Partnership Agreement
ADNOC Abu Dhabi National Oil Company
IMEC India-Middle East-Europe Economic Corridor
I2U2 India, Israel, UAE, US grouping
Local currency settlement Trade paid in rupee and dirham
Re-export hub Port and free zone redistributing goods

Exam Corner

Points to Remember

CEPA in force from 1 May 2022.
Trade above 100 billion dollars in 2024-25; target 200 billion by 2032.
Sheikh Mohamed bin Zayed visited on 19 January 2026.
LNG deal: 0.5 million tonnes a year for 10 years from 2028.
About 3.5 million Indians in the UAE.

Do Not Confuse With

UAE CEPA and Australia ECTA Different partners; the UAE deal is wider in scope
I2U2 and IMEC A grouping versus an economic corridor
UAE and Saudi partnerships Separate agreements with different councils

Memory Hook

Twenty-two signed CEPA in under ninety days; a hundred billion now, two hundred by thirty-two.

Mains Angle

Questions ask about the model value of the UAE partnership. These points add depth.

Economy Trade growth
Energy LNG and nuclear
Hub Africa and West Asia

A Question You May Face

An original practice question, not a past paper question.

“How has the CEPA with the UAE transformed India-UAE relations, and what challenges could slow the 200 billion dollar target?”

How to Answer

CEPA Terms and growth.
Pillars Energy, investment, defence.
Challenges Conflict and deficit.
Outlook Local currency, new sectors.

GS Relevance

Prelims: CEPA dates, trade targets, LNG deal, IMEC, local currency settlement. GS Paper 2: India and West Asia; diaspora; GS Paper 3: trade and energy.

Frequently Asked Questions

What is the India-UAE CEPA?

The India-UAE Comprehensive Economic Partnership Agreement was signed in February 2022 and came into force on 1 May 2022. It reduces tariffs on most goods and opens services trade, and it lifted bilateral trade above 100 billion US dollars in 2024-25.

What trade target have India and the UAE set?

During President Sheikh Mohamed bin Zayed's visit to New Delhi on 19 January 2026, India and the UAE set a target of about 200 billion US dollars of bilateral trade by 2032, roughly doubling the level of 2024-25.

What LNG deal did India and the UAE sign in 2026?

ADNOC Gas agreed to supply liquefied natural gas to Hindustan Petroleum, about 0.5 million tonnes a year for 10 years starting in 2028. The deal was reported at 2.5 to 3 billion dollars, within a total of over 20 billion dollars in UAE LNG contracts.

Why is the UAE important to India?

The UAE is one of India's top trading partners, a major source of energy and investment, and home to about 3.5 million Indians. It is also a re-export hub that gives Indian firms access to West Asia and Africa, and a partner in defence and nuclear cooperation.

What is IMEC?

The India-Middle East-Europe Economic Corridor is a planned network of ports, railways and shipping routes announced in 2023 to link India with the Gulf and Europe. The UAE and Saudi Arabia are part of it, and it aims to cut cost and time in trade.

PYQ Practice — Statement Analysis

1 The India-UAE CEPA came into force in May 2022.

True

It was signed in February 2022.

2 India and the UAE set a trade target of 200 billion dollars by 2032.