UAE-India Agree to Set Up Food Corridor in India

The UAE’s food security plans received further boost with the Emirates and India agreeing to set up a $2 billion India-Middle East food corridor, especially the UAE, by building food processing facilities and food parks in India.

Food parks are among areas for greater collaboration and investments between India and UAE. It will lead to higher income for farmers, jobs’ creation in food processing sector, and enhance food security for the UAE.

Speaking to media after co-chairing the 12^th meeting of the UAE-India High Level Joint Task Force on Investments (HLJTFI) in Mumbai with H H Sheikh Hamed bin Zayed Al Nahyan, Managing Director of Abu Dhabi Investment Authority (ADIA)., India’s Commerce and Industry Minister Piyush Goyal said that the UAE has funnelled an initial $2 billion commitment into the initiative.

His Highness Sheikh Hamed said that the India-UAE CEPA, signed in 2022, has been a major catalyst for strengthening economic ties and enhancing cross-border trade between the UAE and India. “Against this positive backdrop, the Joint Task Force continues to play an important role as a forum to explore new investment opportunities, remove impediments to further cooperation and work together in pursuit of shared goals,” he explained.

With the proposed investment, both sides will be building infrastructure including food processing units and food parks to support both Indian farmers and agribusinesses, and ramp up Indian agriculture exports to the UAE and the broader Middle East.

The project is expected to be rolled out over two or two and-a-half years, and a small working group comprising officials from both countries to has been formed to oversee the project work.

“It has been under discussion for a very long time that the UAE would like to invest in setting up food processing facilities in India to enable the availability of high-quality products suitable to the UAE taste in India using Indian farmers’ products and to be sold in the Emirates,” the Indian Minister said.

FTA Reviewed

The Joint Task Force reviewed the working of the India-UAE CEPA, which was one of the fastest-ever negotiated Free Trade Agreements (FTA), which is designed to stimulate increased trade and boost the trading relationship between the two countries.

As a result of the deal, bilateral trade has risen consistently, with non-oil trade rising to $28.2 billion in the first half of 2024, a 9.8% year-on-year increase. The agreement has also spurred FDI – as of 2023, the UAE is India’s fourth largest foreign investor with $3.35 billion committed across a wide range of sectors, representing a threefold increase on 2022.

Indian FDI into the UAE in 2023 totalled $2.05 billion, more than 2021 and 2022 combined. These figures represent real growth with real, on-the-ground impact. Further, it has led to job creation in Indian market and export from labour-oriented sectors is growing rapidly.

According to media reports, Goyal is said to be in talks with the UAE to increase its FDI in India to $100 billion, up from some $75 billion in commitments currently. This came alongside reports of India working to encourage UAE investments, the Abu Dhabi Investment Authority setting up shop in India, and more.

The joint meeting also agreed to set up investment promotion offices in each other’s countries, with the UAE’s office set to be co-located with Invest India in New Delhi. India is also planning to establish its first overseas campus of the Indian Institute of Foreign Trade in the UAE, starting with courses that will evolve into a full campus.

The meeting also welcomed the announcement of the ADIA establishing a subsidiary at GIFT City in the Indian state of Gujarat. This underlined the strong interest from UAE’s institutional investors in India’s growing and dynamic economy, and GIFT City’s reputation as world-class financial services centre, operating under a strong regulator and a robust legal framework.

During the meeting, the Indian Government has also decided to open an office of Invest India in Dubai, UAE to serve as a dedicated point of contact for the potential UAE investors seeking to invest in India.