The video call started late because Ramesh was on the factory floor in Ludhiana. He makes spanners and pliers for hardware shops from Muscat to Mombasa. "Haseeb," he said, still in his safety glasses, "everyone tells me the UAE India CEPA saves me 5 per cent duty. I already knew that. What else is there?"
It was the right question. Four years after the agreement came into force, the duty saving is the least interesting part of it. The real UAE India CEPA SME opportunities now sit in what you build on top of that saving: finishing, packaging, financing and selling from a UAE base to markets far beyond India and the Emirates.
Where the agreement stands today
India and the UAE signed their Comprehensive Economic Partnership Agreement on 18 February 2022, and it entered into force on 1 May 2022. It was the UAE's first CEPA, and it became the template for the many agreements the UAE has signed since.
The numbers kept climbing. The UAE Ministry of Foreign Trade reported non-oil trade with India of US$37.6 billion in the first half of 2025 alone, up 33.9 per cent on the same period a year earlier, according to WAM. Both governments have set a shared goal of US$100 billion in non-oil, non-precious-metals trade by 2030.
Two more pieces sit around the CEPA. A new bilateral investment treaty, signed in Abu Dhabi on 13 February 2024, entered into force on 31 August 2024, according to India's Ministry of Finance. And in July 2023 the Reserve Bank of India and the Central Bank of the UAE agreed a framework to settle trade in rupees and dirhams. Together that means lower duty, protected investment and a cheaper way to pay.
From shipping goods to making them together
In my experience the first wave of CEPA users were traders who landed Indian goods here and resold them at a better margin. Good business, but easy to copy.
The second wave, which I see in Ras Al Khaimah every month, sets up a small unit in a free zone and adds value before the goods move on: cutting, assembling, kitting, labelling or testing. When the rules of origin are met, the finished product can travel under the UAE's own trade agreements to other markets.
That was my answer for Ramesh. His tools ship in bulk from Punjab. In a small warehouse in Ras Al Khaimah he can kit them into branded sets with cases, manuals in Arabic, French and Swahili, and retail barcodes. The same container then serves hardware chains in the Gulf and distributors in East Africa.
Five openings I would look at this year
Finishing and re-export units. Textiles, spices, hand tools, auto parts and engineering goods all gain from a final stage close to the buyer. Light assembly needs less space than people expect.
Food corridors. In October 2024 India's Commerce Minister announced that the UAE would invest about US$2 billion in food parks in India, linking Indian farms to Gulf demand. Around that money sit smaller businesses: cold storage, grading, packing, private-label brands and halal certification.
Payments and trade finance. Rupee-dirham settlement is still young and few small exporters use it. Fintech founders who make it simple will find a market waiting.
Jewellery design and hallmarking. The flagship sector is moving from raw trading toward design studios, certification and branded retail.
Digital services. India's Digital Personal Data Protection Act 2023 and the UAE's Personal Data Protection Law give software and health-tech firms clearer rules for serving both markets.
Why SMEs, not only big groups, can win here
A large group has lawyers for every chapter of the agreement. An SME has an owner and an accountant. I find that is often an advantage: a small firm can pick one product, one free zone and one export market and move in weeks. It also works in reverse. A Ras Al Khaimah trading company that sources well from Coimbatore or Rajkot can serve buyers across the Gulf and Africa without owning a factory.
For the product-by-product tariff view, see my earlier post on ten products Indian exporters sell better under CEPA.
How to get started without wasting a month
- Find your product's HS code and check it against the CEPA tariff schedule and its rules of origin before you sign anything.
- Decide what value you will add in the UAE, and confirm with a customs broker whether it is enough to give the goods UAE origin for your next market.
- Pick a free zone that licenses the activity. Ras Al Khaimah's free zones offer both trading and light industrial licences, so ask which activities can share one licence.
- Ask your bank about rupee-dirham settlement, and ask Etihad Credit Insurance about cover for your first export buyers.
One honest caution
Rules of origin are where good plans fail. Repacking alone rarely changes origin, and each agreement sets its own test. Ask the customs question before you lease the warehouse, in writing, and keep the answer on file.
What this means for you
The UAE India CEPA is no longer news, which is exactly why it is useful: the rules are settled and the logistics are tested. The founders who will do best over the next four years are the ones who stop asking "how much duty do I save?" and start asking "what can I build here?"
Ramesh is now pricing a kitting unit. What would you finish, pack or assemble in the UAE if you had the space? Tell me in the comments. Tomorrow morning I look at the UAE Indonesia CEPA and the halal food openings it creates.
This article is general information, not legal, tax or investment advice.
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