The Gulf corridor: from a 100-billion-dollar milestone to a 200-billion-dollar target

India's fastest-growing major trade corridor runs west, across the Arabian Sea. The India–United Arab Emirates Comprehensive Economic Partnership Agreement, CEPA, signed on 18 February 2022 and in force since 1 May 2022, has driven bilateral trade past 100 billion dollars ahead of schedule: trade reached 101.24 billion dollars in the financial year 2025–26, crossing the 100-billion mark for the second consecutive year, with non-oil trade accounting for nearly two-thirds of the total. India's exports to the UAE are led by gems and jewellery at 8.68 billion dollars, followed by engineering goods, petroleum products, electronic goods, chemicals, garments and agricultural products.

In January 2026, during the UAE President's visit to India, the two sides set a new target: doubling bilateral trade to 200 billion dollars by 2032, alongside a long-term liquefied natural gas supply deal and deeper cooperation in defence, space and emerging technologies. Prime Minister Narendra Modi's visit to the UAE on 15 May 2026 produced further agreements covering energy, defence, shipbuilding, artificial intelligence infrastructure and investments of up to 5 billion dollars. The corridor has also moved beyond hydrocarbons: non-oil trade grew by nearly 20 per cent in one year to about 65 billion dollars, and the two governments have set a goal of 100 billion dollars in non-oil, non-precious-metal trade by 2030.

The Gulf story now extends beyond the UAE. India and Oman signed a Comprehensive Economic Partnership Agreement on 18 December 2025, under which Oman has committed to eliminating duties on 98.08 per cent of its tariff lines, covering a reported 99.38 per cent of India's current exports to Oman by value. The UAE model — a fast, comprehensive agreement followed by investment, energy and technology cooperation — is being repeated as a template for the wider Gulf Cooperation Council region, with which India's total trade reached 178.56 billion dollars in 2024–25, about 15.42 per cent of India's global trade.

One structural fact tempers the success story. India's trade deficit with the UAE remained high, at 26.8 billion dollars in 2024–25, because crude oil imports are relatively price-inelastic: India buys energy it cannot easily replace, while its exports must compete for every order. The Gulf corridor therefore illustrates both the promise and the limit of trade agreements. They can accelerate non-oil trade, investment and strategic cooperation, but they cannot by themselves remove a deficit rooted in energy dependence.