Other BriefingsUAE-India CEPA at Three Years: Trade and Investment Growth, Opportunities
The UAE-India CEPA accelerates bilateral trade by removing barriers and boosting market efficiency. The agreement fuels strong growth in strategic sectors, enhances India’s export competitiveness, and reshapes sourcing and investment flows. It also creates new value chain linkages and positions CEPA as a catalyst for long-term economic partnership and regional leadership.
By Yanyan Shang
India and the United Arab Emirates signed the Comprehensive Economic Partnership Agreement (CEPA) in February 2022, marking a new phase in Asia-Gulf economic cooperation.
CEPA holds strategic value by linking India’s manufacturing strength with the UAE’s role as a regional trade and logistics hub. It supports both countries’ ambitions to expand market access and deepen commercial ties across the Middle East, Africa, and South Asia.
Three years in, CEPA has delivered tangible results. Bilateral trade has surged particularly in the gem and jewelry sector. Indian exporters benefit from tariff-free access, while UAE businesses gain reliable sourcing and investment prospects. The agreement’s success offers valuable insights for companies exploring cross-border growth and diversification.
Trade surge under the UAE-India CEPA
Since its implementation, total trade between the two countries rose from US$20.88 billion in FY2022 to US$28.15 billion in FY2024—a robust 35 percent increase, according to data from GJEPC Research Division. This growth reflects the early success of CEPA in removing trade frictions and creating new channels for commerce.
India’s gem and jewelry exports to the UAE surged from US$4.95 billion to US$8.04 billion—a rise of over 60 percent. The UAE now accounts for nearly a quarter of total exports in this sector, overtaking Hong Kong as India’s second-largest market.
CEPA’s tariff eliminations and improved market access have strengthened the UAE’s role as a key trade destination for Indian exporters. The agreement has not only deepened trade volumes but also broadened the scope of engagement across high-value sectors.
Sector focus: Jewelry and precious metals
Duty-free access under CEPA has significantly boosted India’s gem and jewelry exports to the UAE, transforming the trade landscape for high-value products. Plain gold jewelry exports more than doubled, rising by 127.6 percent to US$4.24 billion in FY2024. Studded gold jewelry followed with a 50.6 percent increase, while worked lab-grown diamonds grew by 58.2 percent, reaching US$172 million. Platinum jewelry saw the most dramatic surge, up over 820 percent to US$23 million, reflecting growing demand in premium segments.
These gains highlight strong business opportunities across the jewelry value chain. Exporters benefit from a simplified trade regime and rising demand in the UAE’s luxury retail market, while importers in the UAE gain reliable access to diverse and competitively priced Indian products. As the market matures, companies that integrate design, manufacturing, and distribution will be best positioned to capitalize on the evolving India-UAE jewelry corridor.
Investment and import dynamics
CEPA reshaped India’s gold import strategy through the Tariff Rate Quota (TRQ) mechanism, allowing UAE-origin gold to enter at just 1 percent duty. This triggered a 126.8 percent surge in imports, reinforcing India’s cost competitiveness and supply chain efficiency.
The TRQ benefit has made UAE gold imports more attractive compared to other global suppliers, encouraging Indian refiners and jewelers to reorient sourcing strategies toward the Gulf region. This shift not only deepens bilateral trade but also enhances supply chain reliability for India’s gold-dependent industries.
Strategically, the increased gold inflow strengthens India’s position as a global jewelry manufacturing hub and supports downstream investments in refining, value addition, and export-focused production. For UAE stakeholders, it opens up long-term opportunities to invest in India’s growing jewelry parks and infrastructure aligned with Make in India initiatives.
Strategic implications and business opportunities
The UAE-India CEPA has given Indian exporters a competitive edge in one of the world’s leading luxury retail hubs. With tariff-free access and simplified procedures, Indian jewelers can now expand their presence in the UAE’s dynamic consumer market, where demand for high-quality, competitively priced products continues to grow.
This evolving trade ecosystem creates strong incentives for deeper business integration. Indian manufacturers can leverage their production scale and cost efficiency, while UAE-based retailers provide access to affluent consumers and global re-export channels. A joint value chain—combining India’s manufacturing base with the UAE’s retail and logistics strengths—offers clear advantages in speed, flexibility, and reach.
To further strengthen bilateral collaboration, GJEPC recommends recognizing IJEX Dubai as a designated zone to streamline CEPA-compliant imports, encouraging UAE investment in India’s jewelry parks and mega CFCs, and easing procedures around consignment-based exports and exhibitions.
Future outlook
The UAE-India CEPA stands out as a benchmark for modern trade agreements—combining tariff liberalization with targeted sectoral benefits and investment facilitation. As both countries continue to build on its momentum, bilateral trade is well-positioned to reach US$30 billion within the next five years.
To sustain this trajectory, key reforms are needed to improve trade logistics, address procedural bottlenecks, and expand infrastructure supporting jewelry manufacturing and exports. Recognizing designated trading zones, simplifying re-import and exhibition shipment policies, and enhancing customs clarity will be critical in maintaining India’s export competitiveness.
CEPA also plays a strategic role in empowering micro, small, and medium enterprises (MSMEs), enabling them to integrate into global value chains. The agreement has already supported job creation and industrial diversification in India’s manufacturing clusters. Going forward, stronger institutional collaboration, investment in digital trade facilitation, and cross-border supply chain development will ensure that CEPA continues to drive inclusive and resilient economic growth for both nations.
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