A data by the Government of India has revealed that UAE has become the fourth largest investor in India during FY 22-23. It was ranked at the seventh spot in the previous 2021-22 list.

Whereas, Singapore remained the largest investor in India with USD 17.2 billion investment in FY23, this was followed by Mauritius USD 6.1 billion and the US USD6 billion.

India had signed a comprehensive free trade agreement  with the UAE last year in May. Also, this fiscal year, the foreign direct investment (FDI) from UAE to India soared three times from USD 3.35 billion to USD 1.03 billion in 2021-22, the data by the Department for Promotion of Industry and Internal Trade (DPIIT) depicted.

One of the major factors behind increased FDI from UAE in India is the signing of the Comprehensive Economic Partnership Agreement (CEPA) on February 18, 2022. Under this agreement, various goods from both the countries are getting zero-duty access to each other’s market. Besides this, both the countries are also getting access to eased norms for promoting investments.

"The rapidly strengthening of bilateral ties and investment cooperation between India and United Arab Emirates (UAE) can be chiefly attributed to the strong bilateral relations between India and UAE, growth in investment commitments from UAE, and the policy reforms to further ease of doing businesses between the two countries," Rudra Kumar Pandey, Partner, Shardul Amarchand Mangaldas & Co, was quoted as saying by the PTI.

UAE has majorly invested in sectors like services, sea transportation, power and construction activities in India. 

"Apart from CEPA, another growth engine of FDI from UAE in India is the investment commitment from UAE. UAE has committed to invest USD 75 billion in the Indian infrastructure sector over a period of time. It has also committed to partner with India in the renewable energy sector," Pandey further explained.