Three-fold rise in FDI as countries celebrate one year of Cepa.
Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, held a meeting with Shri Piyush Goyal, Honorable Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution, and Textiles in New Delhi. The ministers jointly addressed a press conference to announce the successful conclusion of the inaugural meeting of the UAE-India Comprehensive Economic Partnership Agreement (Cepa) Joint Committee, as reported by WAM.
Official data reveals that the UAE has emerged as the fourth largest investor in India during the fiscal year 2022-23. Foreign direct investment (FDI) from the UAE, the second-largest economy in the Arab world, to India has more than tripled from $1.03 billion in 2021-22 to $3.35 billion in 2022-23. This increase follows the signing of the landmark Comprehensive Economic Partnership Agreement (Cepa) between the two nations in 2022. The Department for Promotion of Industry and Internal Trade (DPIIT) provided this information.
According to the DPIIT data, Singapore ranks as the top investor in India with an investment of $17.2 billion in FY23, followed by Mauritius ($6.1 billion) and the US ($6 billion).
The UAE's share of India's total FDI received between April 2000 and March 2023 stands at around 2.5 percent. By the end of 2022, the total FDI from the UAE to India amounted to Dh56.5 billion, as both countries have intensified efforts to enhance mutual investments and diversify them into new sectors, stated Abdulla bin Touq Al Mari, UAE Minister of Economy.
The UAE's FDI in India has primarily been in the fields of renewable energy, telecommunications, road infrastructure, real estate, and start-ups. Additionally, Indian FDI in the UAE reached Dh30 billion in 2020. Besides the Cepa, another factor driving UAE's FDI in India is Abu Dhabi's commitment to invest $75 billion in the Indian infrastructure sector over time. The UAE has also expressed its intention to collaborate with India in the renewable energy sector.
In the Middle East region, the UAE ranks first, accounting for 37 percent of the total FDI inflow to the region in 2022, which amounted to $55.5 billion, according to the World Investment Report 2022 by the United Nations Conference on Trade and Development.
According to the FDI Markets report, India is among the top five source countries for Dubai's announced FDI projects and estimated FDI capital. In 2022, India accounted for 12 percent of announced FDI projects in Dubai, with only the US (20 percent) and the UK (13 percent) ahead. Comparing 2021 and 2022, the number of FDI projects from India to Dubai increased from 78 to 142. The value of FDI from India in 2022 was $545.52 million, compared to $363.85 million in 2021. The majority of FDI projects from India to Dubai in 2022 were in the software & IT services sector (32 percent), followed by business services (19 percent), consumer products (9 percent), real estate (6 percent), and financial services (5 percent). In terms of value, the top sectors for FDI from India to Dubai in 2022 were consumer products (28 percent), software & IT services (20 percent), communications (19 percent), pharmaceuticals (8 percent), and business services (8 percent).
News Source: Khaleej Times