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The recent bilateral investment agreement between India and the United Arab Emirates is vital in raising investor confidence. It will expand and facilitate foreign direct investment (FDI) endeavors between the two nations. The UAE and Indian governments have entered into a bilateral investment treaty to enhance trade prospects and foster foreign investments.

In line with this initiative, the government in New Delhi has earmarked an additional Rs296.10 billion ($3.57 billion) under the Infrastructure Development Fund (IDF) to spur investments across various sectors. These sectors encompass dairy processing, meat processing, animal feed plants, breed multiplication farms, agri-waste management, as well as veterinary vaccine and drug production facilities.

In an official statement, the government expressed optimism about the bilateral treaty with the UAE. It would bolster investor confidence, particularly among key stakeholders. Therefore, it could attract greater foreign investments and avenues for overseas direct investment (ODI).

The announcement was made during a Union Cabinet meeting among Indian officials. According to the Indian Government, this new initiative could facilitate the realization of the Atmanirbhar Bharat initiative. The initiative aims to foster self-reliance in India. This will bolster domestic manufacturing, reduce dependence on imports, and amplify exports to other nations.

For the UAE, the new bilateral trade agreement comes after significant growth in the country’s greenfield FDI announcements. Notably, newly announced FDI projects surged by 28% in the third quarter of 2023 compared to the previous year’s. Overall, FDI inflows into the UAE amounted to $22.75 billion in 2022.

Similarly, India has witnessed an uptick in FDI inflows in recent years, with $70.97 billion recorded in 2022–23. Cumulatively, FDI inflows in the country amounted to $953.14 billion between April 2000 and September 2023, with a substantial portion received over the past nine years.

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