India-UAE Trade Pact Fuels Bilateral Trade Surge, Exceeding $100 Billion, Says Goyal

The completion of the India-UAE free trade agreement, formally known as the Comprehensive Economic Partnership Agreement (CEPA), has significantly bolstered bilateral trade, surpassing $100 billion for the first time. According to Union Minister Piyush Goyal, the total bilateral merchandise trade reached $101.25 billion in 2025-26, an increase from $100.03 billion in the previous year. Noteworthy is that this growth is attributed to robust performance in key sectors such as gems and jewellery, engineering goods, electronics, and agriculture. While India’s exports to the UAE have registered a modest increase, the country’s imports have risen slightly more, resulting in a trade deficit of $26.53 billion.

This development is pivotal for the common citizen as it signifies increased job opportunities stemming from enhanced trade relations. The growth in exports could potentially lead to more manufacturing jobs, while the sectors benefiting from trade expansions could see further investment and development. For the market, the widening trade deficit may raise concerns about dependency on imports; however, the positive trajectory in exports suggests a diversified market strategy that may stabilize and stimulate economic growth. Additionally, the foreign direct investment (FDI) from the UAE, although decreased compared to the previous year, underscores the ongoing interest of foreign investors in Indian markets.

Looking ahead, the government and RBI will likely focus on strengthening trade relations further with the UAE and expanding to target other markets in Africa, the GCC, CIS countries, and Europe, as indicated by the CEPA’s design. Efforts may also be directed towards addressing the trade deficit through improved export strategies and regulatory measures aimed at enhancing the competitiveness of Indian goods. The next steps may include reinforcing supply chains, fostering technology transfer, and incentivizing industries that are lagging behind to leverage the benefits of international trade in the coming years.