An Empirical Analysis of The Bilateral Trade Relationship Between India and The United Arab Emirates

An Empirical Analysis of The Bilateral Trade Relationship Between India and The United Arab Emirates Dr. Priyesh Chaursiya* Saty Prakash ** India and the United Arab Emirates (UAE) have developed one of India's most important bilateral trade relationships in the Gulf region. This paper empirically examines the evolution of bilateral merchandise trade between the two economies, focusing on exports, imports, total trade, trade balance, long-run growth and the period following implementation of the India–UAE Comprehensive Economic Partnership Agreement (CEPA) in May 2022. The analysis uses annual financial-year data compiled from Government of India Department of Commerce/DGCIS statistics and cross-checked with World Bank WITS/UN Comtrade data for merchandise trade. Descriptive statistics, compound annual growth rates, export–import correlation and a log-linear time-trend regression are used. The evidence indicates a strong long-run expansion of bilateral trade, with total merchandise trade increasing from about US$3.09 billion in FY1997-98 to US$100.06 billion in FY2024-25. The relationship was interrupted by the COVID-19 shock in FY2020-21, when bilateral trade fell to about US$43.3 billion, before rebounding strongly. India's trade balance shifted from periods of surplus to a persistent deficit in the recent period, reaching about US$26.78 billion in FY2024-25. Average annual trade in the three post-CEPA financial years was substantially above the average for FY2018-19 to FY2021-22. However, the paper does not interpret this temporal association as a causal CEPA effect because the post-treatment period is short and coincides with changes in energy prices, gold trade, global demand and post-pandemic normalization. The results suggest that the bilateral relationship has deepened considerably, but that the composition and balance of trade remain important policy issues. * Assistant Professor, Department of Economics, Shivharsh Kisan P G College Basti ** Assistant Professor, Department of Economics,Pt Mahadev Krishak Shukla PG College Basti