50 years ago: Scope for India-UAE co-operation

1. At a Glance

• This is a "50 years ago" archival piece in The Hindu (8 October 2026). It reports President Fakhruddin Ali Ahmed returning to New Delhi on 7 October from a four-day State visit to the UAE [1].
• The 1976 talks rested on shared Non-Alignment, peaceful co-existence and South–South economic co-operation ("our requirements are similar") [1].
• The economic co-operation discussed in 1976 later became the Comprehensive Strategic Partnership and the India–UAE CEPA (in force since 1 May 2022) [3][8].
• For UPSC, it is useful for tracing a bilateral relationship from Cold War-era NAM solidarity to today's trade and investment partnership (GS-II, India and its neighbourhood / West Asia).

2. Why in the News

• The Hindu's "50 years ago" column, 8 October 2026 (Chennai edition, p. 13), reprinted the report on President Ahmed's UAE State visit [1].
• Current link: bilateral trade crossed USD 100.06 billion in FY 2024–25, up 19.6%. This was noted at the Third CEPA Joint Committee Meeting [4].

3. Background & Evolution

• 1976 (the visit):
• President Fakhruddin Ali Ahmed made a four-day State visit to the UAE. He returned to New Delhi on 7 October [1].
• At the airport he was received by:
  • Vice-President B.D. Jatti
  • PM Indira Gandhi
  • Congress President D.K. Barooah
  • Central Ministers and MPs [1]
• He met Sheikh Zayed (President of the UAE) and Sheikh Rashed (Vice-President) [1].
• UAE leaders backed closer economic co-operation among developing countries. They wanted to give the relationship "a new turn" suited to "the present technological world" [1].

• Ahmed said the UAE leaders appreciated India's efforts to normalise relations with neighbours [1].

• Formal launch of CEPA negotiations: announced in a joint press statement [9].

• CEPA negotiated in just 88 days, according to the DPIIT Secretary [7].
• India–UAE Virtual Summit:
• CEPA was signed, with the aim of raising goods trade to USD 100 bn within five years [5][8].

• The PM and the Crown Prince issued the Joint Vision Statement "Advancing the India and UAE Comprehensive Strategic Partnership: New Frontiers, New Milestone" [8].

• 18 February 2022: CEPA signed. The third anniversary fell on 18 February 2025 [2].

• 1 May 2022: CEPA entered into force [2][3].
• FY 2024–25: bilateral trade crossed USD 100 bn [4].

4. Core Static Facts

Item	Fact
1976 visitor	President Fakhruddin Ali Ahmed (four-day State visit) [1]
UAE President (1976)	Sheikh Zayed [1]
UAE Vice-President (1976)	Sheikh Rashed [1]
Shared doctrine (1976)	Non-alignment, peaceful co-existence [1]
Indian PM (1976)	Indira Gandhi [1]
CEPA signed	18 Feb 2022 [2]
CEPA in force	1 May 2022 [3]
Negotiation time	88 days [7]
Goods-trade target at signing	USD 100 bn within 5 years [5]
Long-term potential	USD 250 bn by 2030 [6]
Non-oil trade target	USD 100 bn by 2030 [2]
Trade FY 2020–21 → FY 2023–24	USD 43.3 bn → USD 83.7 bn (nearly doubled) [2]
Non-oil trade FY 2023–24	USD 57.8 bn (more than half of total trade) [2]
India's non-oil exports FY 2023–24	USD 27.4 bn; average growth 25.6% since CEPA [2]
Total trade FY 2024–25	USD 100.06 bn, up 19.6% [4]
Institutional review mechanism	CEPA Joint Committee (3rd meeting held) [4]

5. Multi-Dimensional Analysis

Historical

• The 1976 relationship rested on NAM solidarity. Both sides saw non-alignment as "the only way to bring about a just world" [1].
• The UAE leaders' call for South–South co-operation anticipated today's trade framework. The CEPA is the formal expression of the 1976 phrase "our requirements are similar" [1][5].

Economic

• Merchandise trade nearly doubled in three years under CEPA (USD 43.3 bn → USD 83.7 bn) [2].
• The trade basket is diversifying: non-oil trade is now more than half of the total [2].
• Export winners [2]:
• Refined petroleum products
• Gems & jewellery
• Electrical machinery
• Boilers, generators and reactors
• Organic and inorganic chemicals

Geopolitical / Strategic

• The UAE is now a "Comprehensive Strategic Partner", not just a NAM counterpart. The Joint Vision Statement sets a future-oriented roadmap [8].
• In 1976, Ahmed presented regional normalisation and lasting peace as Indian priorities that the Gulf leadership appreciated [1].

Governance / Administrative

• The CEPA has a Joint Committee that reviews its implementation [4].
• Negotiating the agreement in 88 days is presented as a template for India's newer FTA approach [7].

6. Recent Developments (last 12–18 months)

• FY 2024–25: bilateral trade crossed USD 100.06 bn (+19.6%). This was reviewed at the Third CEPA Joint Committee Meeting [4].
• 18 Feb 2025: CEPA completed three years. PIB highlighted non-oil trade of USD 57.8 bn in FY 2023–24 [2]. (This is slightly outside the 18-month window and is included for context.)
• 8 Oct 2026: The Hindu revisited the 1976 Presidential visit in its "50 years ago" column [1].

7. Prelims Hooks

• President Fakhruddin Ali Ahmed made a four-day State visit to the UAE in 1976 [1].
• In 1976 the UAE President was Sheikh Zayed and the Vice-President was Sheikh Rashed [1].
• The Indian Vice-President who received Ahmed at Delhi airport was B.D. Jatti [1].
• The Congress President in 1976 was D.K. Barooah [1].
• India–UAE CEPA signed: 18 February 2022 [2].
• India–UAE CEPA in force: 1 May 2022 [3].
• The CEPA was negotiated in 88 days [7].
• Target at signing: goods trade of USD 100 bn within five years [5].
• Separate target: non-oil trade of USD 100 bn by 2030 [2].
• Projected potential of total trade: USD 250 bn by 2030 [6].
• Bilateral trade crossed USD 100 bn for the first time in FY 2024–25 (USD 100.06 bn, +19.6%) [4].
• Bilateral trade was USD 43.3 bn in FY 2020–21 and USD 83.7 bn in FY 2023–24 [2].
• Joint Vision Statement title: "Advancing the India and UAE Comprehensive Strategic Partnership: New Frontiers, New Milestone" [8].

8. Why the USD 100 Billion Headline Needs a Second Look

• A big part of the new trade is gold and silver, not factories or farms
• Under CEPA, India gives the UAE a 1% duty cut on gold, up to a fixed quantity, and a 7% duty cut on silver with no quantity limit [10][14].
• In FY 2023–24, gold and silver imports from the UAE jumped 210%, to USD 10.7 bn. In the same year, India's other imports from the UAE fell 9.8% [10].

• India's gold-bar imports from the UAE went from USD 3.1 bn in FY 2022–23 to USD 15.3 bn in FY 2025–26 [13].

• Why this happens: the duty gap rewards routing metal through Dubai

• Gold that comes through the UAE pays less duty than gold coming straight from other countries. So traders send it through the UAE.
• This is called duty arbitrage (making money from the difference between two tax rates). It adds to the trade figure without adding Indian jobs or exports.

• When India raised customs duty in 2026, analysts warned that even more gold and silver would move to the UAE route [13].

• The quota keeps growing

• The low-duty gold quota started at 120 tonnes a year in 2022. It reached 160 tonnes in 2024 and will rise to 200 tonnes by 2027 [13][14].

• 200 tonnes is close to one-fourth of India's yearly gold imports [13].

• The fair counter-point: Indian exports really did grow

• India's non-oil exports to the UAE reached USD 27.4 bn in FY 2023–24, growing about 25.6% a year on average since CEPA [2].
• Gems and jewellery, electrical machinery and chemicals are among the export winners [2].
• So CEPA is not hollow. But the USD 100 bn milestone [4] mixes real export growth with bullion flows. An answer should separate the two.

9. What the Government Has Fixed and What Is Still Open

• Rules tightened after the Dubai-route misuse
• In 2025, the government tightened the rules for the gold TRQ (tariff-rate quota: a fixed quantity allowed in at a lower duty). The aim was to stop misuse of the Dubai route [12].

• Platinum was also part of the misuse that the new rules targeted [12].

• GTRI says the concessions themselves should be reviewed

• The think tank Global Trade Research Initiative (GTRI) asked the government to "reassess and potentially revise" the CEPA duty cuts on gold and silver [11].

• GTRI also suggested withdrawing the duty cuts on jewellery imports under the agreement [15].

• Where this fits in the CEPA design

• The CEPA Joint Committee (the body that reviews how the agreement is working) has now met three times [4].
• It is the natural place for the Department of Commerce to raise a review of the precious-metal schedule, instead of acting alone through customs notices.

10. Beyond Trade: Investment Protection and Payments

• The 1976 hope of 'a new turn' has moved from trade into investment
• India and the UAE signed a Bilateral Investment Treaty (BIT) on 13 February 2024. It came into force on 31 August 2024 [16].
• A BIT protects investors from the other country. Here it promises a minimum standard of treatment, no discrimination, and an independent arbitration forum to settle disputes [16].

• PIB says the treaty gives "continuity" of investment protection. It fills the gap so investors are not left without cover [16].

• Paying in rupees and dirhams, not only dollars

• On 15 July 2023, the RBI and the Central Bank of the UAE signed two MoUs [17].
• The first set up a Local Currency Settlement System (LCSS). It lets exporters and importers bill and pay in rupees or dirhams [17].
• Over time this can build a direct rupee–dirham currency market, so traders do not need to convert through the US dollar [17].

• The second MoU links India's UPI with the UAE's instant payment platform for fast cross-border transfers [17].

• Why payments matter for the diaspora

• Over 3 million Indians in the UAE can now use UPI and the UAE's AANI system to send money home in real time [18].

• Remittances (money sent home by workers abroad) are a big part of the relationship. So cheaper and faster transfers help ordinary workers, not only big traders.

• What to watch

• These are frameworks. Their value depends on how many traders actually bill in rupees or dirhams. The sources here give no figures on how much LCSS is used, so do not claim success in an answer.

11. Anchors for Answers

• Data: India–UAE bilateral trade crossed USD 100.06 bn in FY 2024–25 [4]; gold and silver imports from the UAE rose 210% to USD 10.7 bn in FY 2023–24 [10]
• Data: India's gold-bar imports from the UAE went from USD 3.1 bn (FY23) to USD 15.3 bn (FY26) [13]
• Report/Committee: GTRI report (2024) calling for a review of CEPA duty cuts on gold and silver [11]; CEPA Joint Committee, 3rd meeting [4]
• Law/Case: India–UAE Bilateral Investment Treaty, signed 13 Feb 2024, in force 31 Aug 2024 [16]
• Comparison: RBI–CBUAE Local Currency Settlement System (2023) allows trade billed in INR and AED instead of USD [17]
• Scheme: UPI–AANI linkage lets over 3 million Indians in the UAE send money home in real time [18]

12. Mains Relevance

• GS-II: India and its neighbourhood; bilateral, regional and global groupings and agreements involving India; effect of other countries' policies on India's interests (West Asia / Gulf).
• GS-III: Indian economy, external sector, trade agreements.
• GS-I (supporting): post-independence history, including India's NAM-era foreign policy.
• Possible question stems: 1. From non-alignment solidarity to comprehensive strategic partnership — trace the evolution of India–UAE relations and assess the role of CEPA in it. 2. India's FTA strategy has shifted from deep-but-slow to fast-track comprehensive agreements. Evaluate with reference to the India–UAE CEPA. 3. The Gulf is central to India's energy, diaspora and investment interests. Discuss the opportunities and challenges in India–UAE ties.

13. Related Topics to Study Next

• Non-Aligned Movement (NAM): the doctrinal basis of the 1976 talks.
• India's FTA/CEPA network: compare the UAE CEPA with the India–Australia ECTA and the India–EFTA TEPA.
• India–GCC relations: the UAE within the wider Gulf Cooperation Council framework.
• India–Middle East–Europe Economic Corridor (IMEC): the UAE as a connectivity node.
• I2U2 grouping (India–Israel–UAE–US): minilateral cooperation in West Asia.
• Local-currency trade settlement (rupee–dirham): de-dollarisation of trade.
• Indian diaspora and remittances from the Gulf: the social and economic base of the relationship.
• Energy security / strategic petroleum reserves: the role of Gulf hydrocarbons.

(The 1976 article and the PIB sources cited here do not cover these linked topics. Check their facts separately.)

14. NCERT Concepts to Revise

• Non-Aligned Movement (Polity): The 1976 talks rested on NAM solidarity; revise its origins and leaders to explain the shared outlook.
• Non-alignment (Polity): Non-alignment and peaceful co-existence were the doctrine behind India–UAE ties in 1976.
• Comprehensive economic partnership agreement (Economy): The CEPA is the central modern outcome of this relationship and a frequent exam topic.
• Free trade agreement (Economy): Helps you compare a CEPA with a basic FTA, as the note's Mains stems ask.
• De-dollarisation (Economy): Rupee–dirham local-currency settlement is a linked trade theme for India–UAE ties.
• India-Middle East-Europe Economic Corridor (Geography): IMEC makes the UAE a connectivity hub, so it matters for the strategic partnership.

15. Common Errors / Trap Areas

• Signing date vs entry-into-force date: CEPA was signed on 18 Feb 2022 but came into force on 1 May 2022 [2][3].
• Three different USD figures:
• USD 100 bn goods trade within five years (target at signing) [5]
• USD 100 bn non-oil trade by 2030 [2]

• USD 250 bn potential by 2030 [6]

• Roles of the 1976 UAE leaders: Sheikh Zayed was President and Sheikh Rashed was Vice-President. They are often swapped [1].

• The 1976 visit was by the President, not the PM. Indira Gandhi received Fakhruddin Ali Ahmed at the airport; she was not on the visit [1].
• Signing year: the CEPA dates from 2022, not 2017 or 2021 [2].