UAE to Invest $2 Billion in Food Processing Facilities in India Over Next 2.5 Years

The United Arab Emirates (UAE) has announced a substantial investment of $2 billion in India over the next 2.5 years, focusing on establishing food processing facilities across the country. This initiative is designed to utilize India's local agricultural produce to meet the growing demand in Middle Eastern markets and beyond. The announcement follows the 12th meeting of the India-UAE High-Level Joint Task Force on Investments, co-chaired by India's Commerce and Industry Minister Piyush Goyal and Sheikh Hamed bin Zayed Al Nahyan, the Managing Director of the Abu Dhabi Investment Authority (ADIA).

During the discussions, the two nations emphasized their ongoing collaboration under the India-UAE Comprehensive Economic Partnership Agreement (CEPA). A key focus of these talks was the development of a virtual trade corridor and a dedicated food corridor. These initiatives aim to strengthen the trade and investment ties between India and the UAE, as both nations look to enhance their economic cooperation.

The UAE's investment strategy includes a significant ramp-up in core infrastructure, artificial intelligence, data centres, and renewable energy projects within India. This aligns with the broader objective of diversifying and enhancing the bilateral trade framework. Minister Goyal also announced that Invest India is in the process of establishing an office in the UAE, with the host country providing a location at no cost. This office will serve as a hub for the National Industrial Corridor Development Corporation (NICDC) and the Export Credit Guarantee Corporation (ECGC), facilitating better bilateral trade cooperation. In a reciprocal gesture, the UAE will establish a similar office in New Delhi, co-located with Invest India.

Currently, the UAE has invested approximately $20 billion directly in India, with additional funds flowing through various sovereign wealth funds. Minister Goyal highlighted a notable decrease in India's trade deficit with the UAE, which has declined from $22 billion to $12 billion. This reduction reflects the increasing growth of Indian exports to the region and underscores the potential for further economic collaboration.

The rise of the Indian population in the UAE is another significant factor in this relationship, growing from approximately 2.2 million to 3.5 million over the past decade. While discussions on trade and investment have flourished, Goyal pointed out that the employment of Indian nationals in the UAE has yet to be formally addressed in trade talks between the two countries. However, the growing collaboration between India and the UAE signals a promising future for both nations.

The establishment of food processing facilities will not only benefit the agricultural sector in India by providing a stable market for farmers but will also cater to the increasing demand for processed foods in the UAE and surrounding regions. This investment is expected to create jobs, boost local economies, and foster greater innovation in food technology and processing.

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As India and the UAE continue to enhance their economic ties, the focus on food processing and agricultural development will play a crucial role in shaping the future of trade between the two countries. The collaboration under CEPA is set to unlock new opportunities for businesses and create a more robust trade ecosystem that benefits both nations.