Exclusive: New energy in UAE-India economic ties, says Indian ambassador

The UAE-India Cepa which entered into force on May 1 last year, has infused new dynamism into the partnership, says Sunjay Sudhir, Indian Ambassador to the UAE, in an interview to Khaleej Times. This deal is not just about trade, it “energises the economic engagement” between the two countries, he says on the anniversary of the landmark pact coming into force. Now that business and people-to-people ties are booming under the agreement, the focus shifts to investments, services, human resources and startups, he says.

How much has the UAE-India Cepa achieved in a year?

Our achievements have been sky-high. Negotiating a complex trade agreement in just 88 days has never happened before, but we did it. UAE President, His Highness Sheikh Mohamed bin Zayed Al Nahyan, and Indian Prime Minister Narendra Modi were committed to make it happen.

Cepa is not just about trade, though the document talks about tariff lines and trade quotas…and the service sector. This deal is energising the economic engagement between the two sides. There are positive spillover effects on investments, which in turn means more people travel, more Emiratis work in India and more Indians work in the UAE.

There’s also the flow of technology and know-how; investments and trade; it’s all happening. Of course, trade shows immediate results.

What are the key takeaways from Cepa? How does it apply to future bilateral pacts that India would have with other countries?

Our learnings from previous agreements that India had done with other countries came together for this agreement. For example, there was something on digital trade, and on pharmaceuticals. India as you know is the pharmacy of the world, but then there are regulatory issues we face in our export destinations.

There are clear provisions within this pact that if our pharmaceutical products are recognised by eight regulators, including in the US, UK, Australia and a few other countries, then approvals would be deemed in 90 days. There are learnings from this Cepa, and based on our experience, we will be able to negotiate future pacts. It will also equip the UAE better as it does more such agreements.

Are you better off as ambassador with Cepa? Does the structure of this pact aid and assist you in your role?

Certainly, under Cepa we give preferential treatment to imports from each other. My government gives me targets to increase exports to the UAE.

This is not just about trade. When groups or federations from both sides talk to each other, and when both sides package and present incentives to each other, we know exactly what the sides are looking for and can facilitate two-way investments.

Is it a coincidence that the agreement happened when UAE-India ties were on the upswing?

Certainly, it has helped. If you look at major trade agreements, like WTO for instance, they happened during a major crisis. When there is a difficult situation, people are more open to putting their heads together and finding a solution. Covid provided us this opportunity when supply lines were disrupted. There was a special chemistry between our leaders. It was the right (and positive) environment... We made the most of the global challenges and leveraged our closeness.

What are the sectors that benefited the most from the agreement?

Indian exports are expected to cross $31 billion soon. Sectors that benefited the most from the exports side were gems and jewellery, refined minerals, food and agriculture and the FMCG sector.

The pandemic disrupted supply chains, and countries are friend-shoring for the long term to surmount crises…

As far as India and the UAE are concerned, our supply chains have always remained robust. I am sure you heard about the air bubble agreement with the UAE during the Covid peak in 2020-2021. We were still operating at 65 per cent of our pre-pandemic figures, which is huge.

We also had a food bridge to ensure food security for a friend like the UAE. You might call it friend-shoring, but as far as the two countries are concerned, we drew closer during Covid. This was the first Cepa for the UAE, and the first for India in the Mena region.

What does Cepa mean for the average NRI, for someone who works in the UAE, or wants to start a business?

We have seen an increasing trend where more NRIs are investing in India; participating in CSR work; growing businesses and creating more linkages. These linkages support their businesses in the UAE, and they are also taking advantage of Cepa, helping them further reach out into the world.

On the issue of food security, the UAE has plans for food parks in India with an investment of $2 billion.

These may not be under Cepa but talks are progressing very well with the state governments of Gujarat and MP and ADQ. When food parks come up in India, two things will happen: One, it will bolster food security in the UAE; two, it will increase India’s food exports to the UAE, which in turn boosts our trade figures.

UAE airlines are seeking more seats to India while Indian carriers have been asked to fly long haul. Have there been talks and are you closer to finding a deal that benefits both sides?

We have an open mind on this. We have a seat capacity of 50,000 between Abu Dhabi and India each way, and about 65,000 on Dubai-India sectors, in each direction. New players are entering the market. On the UAE side, Wizz Air Abu Dhabi and Air Arabia Abu Dhabi are new players.

There is always a general perception that things are stuck. That’s not true. Of course, if somebody expects that seats will increase tomorrow, it won’t happen. It takes time... negotiations take time. It’s not about putting a number on the table. Along with that number, there are other things that have to be negotiated.

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