UAE, India sign MoU to develop domestic card scheme during high-level trade talks

Image credit: WAM

The 11th meeting of the UAE-India High Level Joint Task Force on Investments (‘the Joint Task Force’) was held in Abu Dhabi on Wednesday. The meet was co-chaired by Sheikh Hamed bin Zayed Al Nahyan, the managing director of Abu Dhabi Investment Authority (ADIA), and Piyush Goyal, Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution, and Textiles, India.

The Joint Task Force was established in 2013 to promote trade, investment and economic ties between India and the UAE.

It has since then provided an effective mechanism for discussion on opportunities and prospects for investments in both countries as well as the resolution of issues faced by investors of the two countries.

UAE, India sign MoUs

The Joint Task Force witnessed the signing of an MOU between the UAE Ministry of Industry and Advanced Technology and India’s Ministry of Commerce and Industry, related to cooperation in the fields of Industry and Advanced Technology.

The MoU will promote cooperation in sectors such as space, healthcare, renewable energy, and artificial intelligence, among others.

Another agreement was also signed between Al Etihad Payments, a subsidiary of the Central Bank of the UAE, and the National Payments Corporation of India. The agreement creates a strategic partnership to develop the UAE’s Domestic Card Scheme (DCS).

The UAE DCS is a key element of the Central Bank of the UAE’s Financial Infrastructure Transformation programme which aims to position the UAE as a global leader in digital financial infrastructure. The DCS will be the nation’s first unified, secure, and efficient card payment platform, accelerating the UAE’s transition to a digital economy by facilitating the growth of e-commerce, providing consumers with a customised offering, enhancing financial inclusion, and reducing the cost of payments.

Piyush Goyal said, “With the conclusion of another fruitful meeting of this Joint Task Force, a lot of ground was covered. Existing collaborations were reviewed and strengthened, and new opportunities for partnerships were explored. The government of India reiterates the importance of food security in the UAE and extends its full support for the same. In this context, the progress of the food corridor project gained great significance, which received more clarity.

“The partnership agreement between NPCI and CBUAE for the development of a National Card scheme for the UAE modelled on India’s RuPay card, is another milestone in our economic engagement. The India-UAE partnership will go a long way and would be exemplary for the world.”

The huge opportunities that ??-?? partnership offers. pic.twitter.com/ctsjoRNfPl

— Piyush Goyal (@PiyushGoyal) October 5, 2023

The meeting was attended by Dr Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade and Khaled Mohamed Balama, Governor of the Central Bank of the UAE, and a number of senior officials from government authorities and investment entities from both countries.

Joint Task Force reviews CEPA trade agreement

During the meeting, the co-chairs reviewed the progress made on the implementation of the Comprehensive Economic Partnership Agreement (CEPA) between the UAE and India, which came into force in May 2022.

The landmark agreement has helped reduce tariffs on more than 80 per cent of product lines, eliminate barriers to trade and create new pathways for investment and joint ventures.

In the first 12 months of the CEPA, bilateral non-oil trade reached $50.5bn, representing a growth of 5.8 per cent compared to the corresponding period a year earlier. The two countries are fast moving towards the target of $100bn in non-oil trade by 2030.

India-UAE Bilateral Investment Treaty

The Joint Task Force delegations discussed the status of negotiations for the India-UAE Bilateral Investment Treaty, underscoring the need to accelerate the bilateral discussions for an early conclusion of a balanced agreement that benefits both countries and their investors.

The two sides also discussed ways and incentives for encouraging further growth in investment flows from the UAE sovereign investment entities into India.

In this context, the Indian side shared opportunities for investments in priority sectors like renewable energy, health, semiconductors and asset monetisation sectors in India.

The Indian side requested to strengthen the mechanism, especially for the facilitation of investments in priority sectors like renewable energy and energy transition. Both sides agreed to use this channel as a means of developing more competitive and accommodating ecosystems that can enable the private sector to fully pursue expansion opportunities in each other’s markets.

Commenting at the meeting, Sheikh Hamed bin Zayed said, “The delegates at today’s Joint Task Force meeting were able to take great satisfaction from the progress made on implementing the landmark Comprehensive Economic Partnership Agreement between India and the UAE, and reiterated their intent to continue working collaboratively to ensure this partnership grows ever stronger. The activities of the Joint Task Force will play an important role in maintaining momentum, exploring new opportunities and ensuring the India-UAE trade and investment relationship continues to flourish.”

Talks also covered the India-UAE Start-Up Bridge, a joint initiative between the UAE Ministry of Economy and India’s Ministry of Commerce and Industry. The bridge is expected to act as a one-stop platform that offers training sessions and knowledge-sharing on important topics such as market access, investment funds, venture capital, incubators and the respective business landscape in each country.

Another important agenda topic was the establishment of the Abu Dhabi – India Virtual Trade Corridor, which aims to increase overall trade volumes by developing data exchange systems to facilitate paperless trade between the two countries, improving efficiencies and security. Both sides agreed to continue coordination and cooperation between the respective counterparts of both countries for the early implementation of this milestone.

The co-chairs also reviewed the progress on key projects including the food security corridor-related investment under the I2U2 Framework into India. The project will be instrumental in addressing food security challenges, with the aim of bolstering the supply of essential food items and establishing a resilient value chain between the two nations.

The Joint Task Force noted the progress of plans for the Abu Dhabi Investment Authority (ADIA) to establish a presence in Gujarat International Finance Tec-City (GIFT City), a financial-free zone in Gujarat, with the aim of facilitating future investments into India. The Indian side invited other Sovereign Wealth Funds in the UAE to establish a similar presence in India.

Also read: G20 summit: UAE, Saudi Arabia, India, US announce historic trade corridor deal