A year after India signed a major free trade deal with the United Arab Emirates, latest Indian government data shows that the Gulf nation has emerged as India's fourth-largest investor.
In 2022-23, foreign direct investment (FDI) from the UAE to India stood at $3.35 billion. This was a three-fold increase from 1.03 billion dollars in 2021-22. The three-fold jump has also helped the UAE to rise from the seventh position it held in 2021-22.
As per reports, the UAE majorly invests in services, sea transport, power, and construction activities across India.
In the fiscal year 2022-23, Singapore was the largest investor in india, with investments worth $17.2 billion. The Southeast Asian city-state was followed by the island nation of Mauritius, which sent $6.1 billion in investments. The third place was taken by the United States with $6 billion worth of investments.
The country accounts for about 2.5 percent of the total FDI India received between April 2000 and March 2023. During this period, India has attracted $15.6 billion worth of overseas inflows from the UAE, the data showed.
Experts say that the Comprehensive Economic Partnership Agreement (CEPA) between India and the UAE, which was signed on February 18, 2022 and came into effect in May last year, has played a key role in boosting UAE's investments in India, say experts.
Under the bilateral deal, a number of goods from both countries are getting zero-duty access to each other's markets. Besides that, norms for promoting investments have been eased.
"Apart from CEPA, another growth engine of FDI from UAE in India is the investment commitment from UAE. UAE has committed to invest $75 billion in the Indian infrastructure sector over a period of time. It has also committed to partner with India in the renewable energy sector," Rudra Kumar Pandey, Partner, Shardul Amarchand Mangaldas & Co, told PTI.