What Happened
- Prime Minister Modi and Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan met on the sidelines of the AI Impact Summit (February 19, 2026) to discuss expanding bilateral economic engagement.
- A term sheet was concluded between India's Centre for Development of Advanced Computing (C-DAC) and UAE-based G42 and Mohamed Bin Zayed University of Artificial Intelligence for deploying a supercomputer cluster in India under the AI India Mission.
- The Abu Dhabi National Insurance Company will establish an office at GIFT City (Gujarat International Finance Tec-City) in Gujarat, marking further internationalisation of India's first International Financial Services Centre.
- A healthcare MoU was signed between the Ministry of Health and Family Welfare and UAE's Ministry of Health and Prevention, alongside encouragement for UAE sovereign wealth funds, including the newest fund L'Imad, to invest in India.
Static Topic Bridges
India-UAE Comprehensive Economic Partnership Agreement (CEPA)
The India-UAE CEPA, signed on February 18, 2022, and operational from May 1, 2022, is one of the most successful bilateral trade agreements in India's recent FTA history. It was the first comprehensive trade pact India signed with any country in a decade (after Japan and South Korea CEPAs in 2010-11). The agreement covers goods, services, investment, digital trade, IPR, and government procurement, going beyond a traditional FTA.
- Signed: February 18, 2022; operational from May 1, 2022
- UAE tariff elimination: 97.4% of tariff lines (99% of India's exports by value); 80.3% duty-free from Day One
- India tariff elimination: ~90% of tariff lines over 10 years
- Bilateral trade (FY 2024-25): Surpassed $100 billion — five years ahead of the original target
- Non-oil trade: Grew nearly 20% year-on-year to $65 billion; in H1 FY 2025-26, non-oil trade reached $38 billion (34% y-o-y increase)
- Revised target: $200 billion bilateral trade by 2032 (upgraded from original $100 billion target)
- Key Indian exports: Gems & jewellery, petroleum products, food items, textiles
Connection to this news: Both leaders commended the CEPA's success in driving bilateral trade past $100 billion ahead of schedule, using this momentum to deepen cooperation in AI, finance, and healthcare — sectors beyond the original trade agreement's scope.
Sovereign Wealth Funds (SWFs) and India's Investment Framework
Sovereign Wealth Funds are state-owned investment vehicles that manage national surplus revenues. The UAE operates several major SWFs: Abu Dhabi Investment Authority (ADIA, ~$993 billion AUM), Mubadala (~$302 billion), and the newly established L'Imad. India has actively courted SWF investment through tax incentives and NIIF (National Investment and Infrastructure Fund), the country's quasi-sovereign wealth fund established in 2015.
- ADIA: Established 1976; one of the world's largest SWFs; ~$993 billion in assets under management
- Mubadala: Abu Dhabi-based; invests in aerospace, ICT, renewable energy, semiconductors
- L'Imad: UAE's newest sovereign fund; discussed during the bilateral meeting for India investments
- NIIF (India): Established 2015; three funds — Master Fund, Fund of Funds, Strategic Opportunities Fund; ~$4.3 billion raised
- Tax incentives for SWFs in India: 100% tax exemption on income from investments in infrastructure (Section 10(23FE) of Income Tax Act); extended to March 2025 and conditionally further
- India targets for UAE investment: Dholera Special Investment Region (Gujarat), National Infrastructure Pipeline, renewable energy
Connection to this news: The encouragement for UAE SWFs including L'Imad to invest in India extends the pattern of SWF engagement that has seen ADIA and Mubadala invest significantly in Indian infrastructure, technology, and financial services sectors since the CEPA.
GIFT City — India's International Financial Services Centre (IFSC)
Gujarat International Finance Tec-City (GIFT City) is India's first and only International Financial Services Centre (IFSC), established under the IFSC Authority (IFSCA) Act, 2019. Located between Ahmedabad and Gandhinagar, it aims to bring back offshore financial transactions to India by offering a regulatory and tax environment comparable to global financial hubs like Singapore, Dubai, and London.
- IFSCA: Single unified regulator for GIFT IFSC; established April 2020 under IFSCA Act, 2019; headquarters in Gandhinagar
- Tax benefits: Zero GST on transactions, 100% tax holiday on income for 10 out of 15 years, zero STT (Securities Transaction Tax), zero CTT (Commodity Transaction Tax)
- Services offered: Banking, insurance, capital markets, fund management, aircraft leasing, bullion exchange, ship leasing
- India International Bullion Exchange (IIBX): Launched at GIFT City in July 2022
- Aircraft leasing: Over 20 aircraft lessors registered at GIFT IFSC
- International entities: Over 500 entities registered; includes global banks, insurance companies, fund managers
Connection to this news: The Abu Dhabi National Insurance Company's decision to establish an office at GIFT City adds to the growing international presence at India's IFSC, validating its positioning as an alternative to Dubai and Singapore for financial services in the region.
Key Facts & Data
- India-UAE bilateral trade (FY 2024-25): Over $100 billion (5 years ahead of target)
- Non-oil trade growth: 20% y-o-y to $65 billion; H1 FY26: $38 billion (34% y-o-y increase)
- Revised trade target: $200 billion by 2032
- AI cooperation: C-DAC + G42 + MBZUAI term sheet for supercomputer cluster under AI India Mission
- GIFT City: India's only IFSC; IFSCA Act 2019; 500+ registered entities
- UAE SWFs: ADIA (~$993 billion), Mubadala (~$302 billion), L'Imad (newest fund)
- India-UAE CEPA: Operational since May 1, 2022; UAE eliminated duties on 97.4% of tariff lines
- Healthcare MoU: India MoHFW and UAE Ministry of Health and Prevention