UAE to invest $25 billion more in India, says Goyal

New Delhi: The UAE has indicated it may invest an additional $25 billion in India in the near future, as the countries resolve to double their annual trade to $200 billion by 2032, Commerce and Industry Minister Piyush Goyal said on Monday.

The UAE has invested about $25 billion in India and aims to increase the investment to $100 billion in the coming years, Goyal said in Mumbai after co-chairing the 14th meeting of the India-UAE Joint High Level Investment Working Group with Abu Dhabi Investment Authority (ADIA) Director General Sheikh Hamed bin Zayed Al Nahyan.

The meeting comes as the ongoing crisis in West Asia has disrupted global supply chains, pushed up energy prices and threatened overall trade and investment prospects in the region.

The UAE is the seventh largest source of foreign direct investment in India and ADIA is one of the world’s largest sovereign wealth funds investing on behalf of the Government of Abu Dhabi.

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The UAE, the minister said, is looking to invest in Indian ports, shipbuilding, space, logistics, startups and the stock market. The two sides also focused on half a dozen areas of shipping – from ship ownership to the development of modern ports and ship manufacturing – for deepening cooperation. A bilateral working group will be established to further develop cooperation.

The joint working group, which was established in 2013 to promote economic ties between the two countries, has provided an effective mechanism to discuss opportunities and prospects for further bilateral trade and investment, while also acting as a forum to address challenges faced by investors from both countries, according to a statement from India’s commerce ministry.

Business payments, energy security

Goyal said the use of the local currency for trade between India and the UAE is on the rise, showing double-digit growth.

“We can only trade in rupees and dirhams. When goods from India arrive in the UAE, we can bid in rupees. When goods from the UAE arrive in India, we can bid in dirhams,” he said.

Under this mechanism, Indian exporters are paid in rupees, while imports from the UAE can be settled in dirhams, reducing the need to route bilateral transactions through the US dollar.

Excess holdings of the trading partner’s currency could be converted into US dollars after three to six months, the minister said. This mechanism is aimed at managing currency balances while supporting direct trade settlement in two national currencies.

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The two sides, the minister said, are considering strengthening cooperation in the field of energy security, including strategic oil reserves, LPG and LNG supplies and undersea pipelines. “Studies are underway and we will see a significant increase in investment from the UAE in this area,” he added.

On ports, Goyal said India’s capacity has doubled in the last decade and will have to double again in the next decade as the economy grows at a rapid pace.

“We will have to double our port capacity again in the next decade. And the UAE will be an important investor, a credible investor, when we develop new ports or expand our existing ports,” he said.

The two sides also agreed to create a more structured and formal working group on issues including civil aviation cooperation, with dialogue on the issue already underway, he said.

Monday’s meeting also covered cooperation in space technology, food security, agri-innovation, logistics, artificial intelligence and emerging technologies and FinTech.

Trade is returning to pre-war levels

While geopolitical conflicts affect trade, trade between India and the UAE is returning to pre-war levels in West Asia, Goyal said.

Bilateral trade grew from nearly US$73 billion in the fiscal year to March 2022 to more than US$101 billion in FY26, boosted by a free trade agreement that entered into force in May 2022.

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“We are very close to it (pre-war levels), another couple of months and we should be back and beyond pre-war levels. Obviously, it is a very critical issue that trade has been affected because of this war,” Goyal said. “And we are finding ways and means to restore it to pre-war levels and then develop it in the years to come.”