The United Arab Emirates (UAE), emerged as a fourth largest investor in India for FY23. India implemented a comprehensive free trade agreement in May last year with UAE.
According to data from the Department for Promotion of Industry and Internal Trade (DPIIT), FDI from the UAE to India more than tripled in the past fiscal year to USD 3.35 billion, up from USD 1.03 billion in 2021-22.
In 2022-23, the UAE was the fourth largest investor in India, up from seventh in 2021-22.
Singapore was the largest investor in India in FY23, investing USD 17.2 billion, followed by Mauritius (USD 6.1 billion) and the United States (USD 6 billion). The UAE's investments in India are primarily in industries such as services, marine transport, power, and construction.
The signing of the Comprehensive Economic Partnership Agreement (CEPA) between India and the UAE on February 18, 2022 (effective May 1, 2022) is one of the critical criteria for an increase in FDI from the UAE.
Since May 1 of last year, India and the UAE have had a full free trade agreement in place. A variety of items from both countries will have zero-duty access to each other's markets as a result of the agreement, as well as relaxed norms to encourage investment.
Between April 2000 and March 2023, the country received around 2.5 per cent of total FDI received by India. According to the data, India has received USD 15.6 billion in foreign inflows from the UAE over this time period.