Shankar Kumar

While Asia in general and the Middle East in particular grapple with escalating tensions due to the Israel-Iran conflict, later joined by the US, India, and UAE were quietly charting a new course in their relationship through the India-UAE Comprehensive Economic Partnership Agreement (CEPA) Start-up series.

Designed to foster innovation-led collaboration between the two countries, the initiative, launched on June 24, seeks to connect India’s brightest entrepreneurial minds with the UAE’s world-class business ecosystem.

Moreover, the initiative has been launched at a time when both India and UAE are enjoying strong economic momentum. After the signing of the CEPA, the trade between the two countries jumped from $43.3 billion to $83.7 billion in five years. Till January 2025, the bilateral trade stood at $80.5 billion.

The two countries are now aiming to take bilateral non-oil trade to $100 billion by 2030. In terms of investment, UAE is the seventh largest with a share of 3% in the total FDI received in India. Between April 2000 and June 2024, India received about $19 billion in FDI from the UAE.

However, it is not just their economic partnership, but growing collaboration in areas such as AI, space, renewable energy, and digital infrastructure, which are creating a buzz in the Gulf region and beyond.

For this, a blueprint was prepared three years ago. The 2022 India-UAE Joint Vision Statement reflected this and maintained how technology would drive the India-UAE partnership.

India-UAE Startup Bridge, launched three years ago, seeks to enhance collaboration between accelerators, incubators, and investors while promoting knowledge exchange and joint ventures between the Indian and UAE tech ecosystems.

India’s growing prominence in the global tech landscape combined with the UAE’s ambition to be a hub of digital innovation has created a fertile ground for dynamic joint ventures and forward-looking initiatives.

UAE as a tech hub

In the Gulf region, the UAE is the only country that is working towards having a top-class tech ecosystem. Under its 4.0 Initiative, it aims to integrate advanced technologies like AI, machine learning, and the Internet of Things (IoT) into its industrial and economic sectors. UAE’s ‘Future 100 Initiative’ is designed to support and recognize the top 100 startups, demonstrating the Gulf country’s commitment to innovation.  

As per media reports, by 2030, AI alone is expected to contribute around $100 billion to the Gulf country’s economy, accounting for nearly 15% of its GDP. It has already positioned itself as a startup hub, boasting 11 homegrown unicorns in the Gulf country---the highest in the region.

While quoting a report from Tracxn, a market research and data platform, Khaleej Times maintained that technology start-ups in UAE raised a total of $872 million in the first quarter of 2025, which is a whopping 194% increase over the same period in 2024.

Significantly, the Dubai Economic Agenda, ‘D33’ targets adding $27 billion to the UAE’s economy through digital transformation by 2033. The Gulf country has developed three tech hubs such as Dubai Internet City, Dubai Silicon Oasis, and Abu Dhabi’s Masdar City and they provide resources and an environment for innovation and growth.

India’s high-tech ambition

Within India, the National Quantum Mission and the Semiconductor Mission are recognized as a much-needed shift in the country’s move towards becoming a leader in high-quality production and innovation.

Launched in April 2023, the National Quantum Mission with a budget of approximately $740 million---allocated for eight-year period from 2023-24 to 2030-31--is designed to propel India to the forefront of quantum technology research and development. Broadly, it will focus on quantum computing, quantum communication, quantum sensing and metrology and quantum materials and devices.

In terms of quantum science and technology (QST) startups globally, India ranks at the 6th position with 53 startups. The US leads with 309 startups, followed by Germany with 110, the UK with 92, China with 63 and Canada with 56. In India, as per the Ministry of Science & Technology, a total of 152 researchers from 43 institutions are contributing to the NQM.

Similarly, the Semiconductor Mission, launched in 2021, aims at developing a full-stack semiconductor ecosystem from design to manufacturing and testing. The $10 billion semiconductor mission is proving as an important milestone in making the country self-reliant in cutting-edge technology. In May, two design centers to work on 3 nano-meter chips were unveiled in India. With this, the country will have a total of six semiconductor manufacturing facilities.

India’s semiconductor market is expected to cross $100 billion by 2030.  It was valued at $45 billion in 2023. This growth is powered by a burgeoning demand for laptops, smartphones, electric vehicles, medical devices, and defense systems---all of which need chips.

Yet what adds momentum to India’s tech ambition is the large presence of startups in the country. It boasts having the third-largest startup ecosystem in the world after the US and China. More than 1.57 lakh certificates were issued by the Department for Promotion of Industry and Internal Trade (DPIIT) for recognition of startups as of December 31, 2024. Currently, it is home to more than 110 unicorns. In the Global Innovation Index (GII), it stood at 39th position among 133 global economies last year.

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As geopolitical unrest and economic uncertainty dog the world, India and the UAE have shown that their relationship stands out as a beacon of transformative collaboration in technology and innovations.