India and the UAE are actively exploring ways to strengthen their economic partnership, with a particular focus on pharmaceuticals, healthcare, and local currency settlement systems. Recent discussions between Indian and UAE officials signal a mutual interest in boosting trade and investment across various sectors.

Enhancing Trade in Pharmaceuticals and Healthcare

Both India and the UAE recognize the potential for increased collaboration in the pharmaceutical and healthcare sectors. During a meeting on August 29 between India's Commerce and Industry Minister Piyush Goyal and the UAE's Minister of Foreign Trade Thani bin Ahmed Al Zeyoudi, key issues were addressed to facilitate trade in these areas, considering evolving geopolitical challenges. The UAE has expressed a positive outlook on expediting registration processes and providing regulatory facilitation for Indian pharmaceutical products. India, in turn, has affirmed its readiness for inspections and audits by UAE authorities. Discussions also highlighted emerging opportunities in traditional medicine, especially ayurvedic products, within the India-UAE partnership. India has welcomed the formation of the Emirates Drug Establishment, viewing it as a positive step towards addressing the concerns of Indian pharmaceutical companies. Both ministers have agreed to address market access and regulatory issues promptly through the CEPA Joint Committee. The CEPA between India and the UAE has significantly boosted the pharmaceutical industry by reducing tariffs, streamlining regulatory processes, and enhancing market access. Indian pharmaceutical companies benefit from preferential treatment, enabling faster entry into the UAE market, while the UAE gains reliable access to affordable, high-quality medicines. The CEPA also encourages joint ventures, R&D collaboration, and investment in healthcare infrastructure, supporting the UAE's goal to become a regional pharmaceutical manufacturing hub.

Local Currency Settlement System

India and the UAE are also making significant strides in promoting the use of local currencies for bilateral transactions. The Local Currency Settlement System (LCSS) aims to reduce dependence on intermediary currencies like the US dollar, thereby lowering transaction costs and settlement times. This system allows exporters and importers to invoice and pay for goods and services in their respective domestic currencies – Indian Rupees (INR) and UAE Dirhams (AED). The establishment of the LCSS is expected to revolutionize how transactions are conducted between the two countries, fostering deeper economic integration and enhancing financial transparency. The first crude oil transaction using the Local Currency Settlement (LCS) mechanism was successfully executed on August 14, 2023. The initiative, endorsed by Indian Prime Minister Narendra Modi and UAE President Mohamed bin Zayed Al Nahyan, aims to boost economic ties by facilitating cross-border trade in local currencies.

Comprehensive Economic Partnership Agreement (CEPA)

These discussions and initiatives take place within the framework of the Comprehensive Economic Partnership Agreement (CEPA), which came into effect in May 2022. The CEPA aims to increase bilateral non-oil trade to $100 billion by 2030. During Minister Al Zeyoudi's visit to Mumbai, discussions focused on the success of the UAE-India CEPA, which entered into force in 2022, and the sectors that can take fuller advantage of its market access provisions. In the first half of 2025, bilateral non-oil trade reached US$37.6 billion, a 33.9% rise on the same period last year. Both sides have emphasized the importance of timely trade data sharing for better monitoring under CEPA and have agreed that the sub-committee on services will convene within two months.

Broader Economic Ties

The UAE is India's second-largest trading partner and largest export destination, while India ranks as the UAE's third-largest trading partner and second-largest export destination. In June 2025, India's exports to the UAE amounted to $2.63 billion, while imports from the UAE stood at $4.21 billion. Both countries are also exploring collaboration in emerging sectors such as renewable energy, digital infrastructure, and supply chain resilience. Initiatives like Bharat Mart, a 2.7 million square foot export hub being built in Dubai, are expected to widen India's export reach through the UAE's global logistics network.