Datanomics: Skew towards UAE continues in bilateral trade with India

India-UAE trade crossed $100 billion in FY25, but rising imports-especially energy-have widened India's trade deficit despite CEPA-driven export diversification

During his visit to India, United Arab Emirates (UAE) President Sheikh Mohamed bin Zayed reviewed the bilateral cooperation between India and the UAE with Prime Minister Narendra Modi. The focus was on trade following the implementation of the Comprehensive Economic Partnership Agreement (Cepa) in 2022. The two leaders set a goal to double the bilateral trade to $200 billion by 2032, after it crossed $100 billion in FY25.

 

Imports from UAE doubled in 10 yrs

 

The bilateral trade between India and the UAE remains skewed in the latter’s favour, with India recording a trade deficit with the UAE of nearly $27 billion in FY25. India’s exports to the UAE have largely stagnated from $33 billion in FY15 to $36.64 billion in FY25. In contrast, imports from the UAE more than doubled from $26.14 billion to $63.4 billion over this period.

 

 

Gulf nation emerges as a major energy source

 

Hindustan Petroleum Corporation Limited (HPCL) has signed a sale and purchase agreement with Abu Dhabi National Oil Company Gas (ADNOC Gas) to purchase liquefied natural gas (LNG). In the last decade, the UAE’s share in India’s global energy imports has increased. 

 

 

Key destination in export diversification

 

India’s export of gems & jewellery, ready-made garments, textiles, auto components, leather products, glass, ceramics and cement to the UAE recorded higher growth in FY26 (Apr-Nov) compared with FY25 (Apr-Nov). This implies increased exports to the UAE amid India’s diversification efforts, particularly in the wake of Trump tariffs.