Published: 9th Feb, 2024
Context
India and the United Arab Emirates (UAE) have solidified their economic ties through the signing and ratification of a bilateral investment treaty (BIT)
About
- The pact would help promote investments between the two countries.
- The treaty is expected to improve the confidence of investors, especially large investors, resulting in an increase in foreign investments and overseas direct investment (ODI) opportunities.
- This may have a positive impact on employment generation.
- Robust Framework: The BIT establishes a framework focusing on mutual benefit, fair treatment, national and most-favored-nation treatment, and protection against expropriation.
- It encompasses various forms of investment and includes provisions for dispute resolution, transparency, corporate social responsibility, environmental protection, and human rights.
Significance of UAE for India
- UAEis the third largest source of FDI into Bharat and seventh largest trade partner of India.
- UAE became the only country with which India has both CEPA and BIT. Even countries like South Korea, Japan and Singapore have a CEPA with India but no BIT.
- The UAE hosts over 3 million Indians, contributing significantly to both economies. Bilateral trade reached $84 billion in 2023.
- Middle-East Economic Corridor project: India and UAE are also key partners in the Middle-East Economic Corridor project, which links Mundra Port in Gujarat to Fujairah Port in UAE by sea, then to Saudi Arabia and Jordan by railroad and there on to Europe via sea as the new trade route to rival Chinese new Silk Road project and North-South corridor via Iran.
- India-UAE relations have become a focal point of India's Extended Neighbourhood and Look West policies in the region. This deal will further boost the relation between the two countries.
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