Authors: 

Shruti Nair, Sreerupa Chakraborty, Mutasim Billah Saad, Tamanna Ashra, Kanav Arora, Adrita Dutta, Aman Chourasiya 

Abstract  

The India-UAE Comprehensive Economic Partnership Agreement (CEPA) 2022 outlined opportunities for renewable energy to benefit from enhanced India-UAE ties. The aim of this study is to understand whether it actually led to increased investments in green energy or whether such investments would have taken place anyway due to the general global trend towards carbon emission reduction and India’s push for renewable energy. The paper provides a detailed study of the linkage between the CEPA and investment in India. It examines the part of the agreement that deals with investments and looks at data from DPIIT and PIB regarding foreign direct investment in India. It also thoroughly analyses UAE’s investments into the renewable energy sector, for instance, Masdar’s investment in Hero Future Energies, Mubadala’s investment in Tata Power Renewables, etc. The paper concludes that while CEPA has helped boost bilateral trade, investments in renewable energy are still limited.  

While India has been attracting large investments in renewable energy, the UAE’s investment has been quite small compared to the rest of India. In terms of FDI, UAE ranks 7th and in terms of non-conventional energy investments, UAE comes 4th in the list while Mauritius, Singapore and Netherlands contribute higher shares. This indicates that the UAE’s investments in renewable energy industry are more significant at the corporate level, specifically as a way to allow large investments for industrial purposes, but with a smaller overall impact on the growth of the renewable energy sector. The findings of the study indicate that while CEPA has indeed contributed to trade, it has not had a significant impact on investments in renewable energy, indicating that trade agreements may not necessarily be effective at promoting investments in a particular sector. Experts on both sides of the agreement consider green hydrogen to be a key area for future cooperation between India and the UAE, which would be beneficial for both countries. The study concludes that such collaborative efforts are the most promising because of the diversity of resources utilized and because the agreement has been signed by the partners only recently. The paper’s findings regarding cause and effect should also be taken with a grain of salt as there is a need for more work using analytical models of trade assessment and qualitative work with investors to refine the predictive power of future research.  

Keywords: FDI, FDI Inflow, Green FDI, Non-Conventional Energy, CEPA, Energy Security, Multiplier Effect, Technological Knowhow, Clean Technology, Green Hydrogen. 

Introduction

On 1st May 2022, the Comprehensive Economic Partnership Agreement (CEPA) between India and UAE was signed (PwC, 2022). It was the first comprehensive trade agreement between India and a Middle East and North Africa (MENA) country and is expected to be a major step towards boosting trade between the two regions, with an ambitious goal of bilateral trade surpassing USD 100 billion by 2030 (Swarajya, 2026). 

CEPA was conceived as a “Next Generation” Free Trade Agreement that would provide a rules based framework in trade in services, goods, investment, rules of origin, and dispute settlement. The focus is on a set of commitments to increase non-oil bilateral trade that extends beyond access to market, such as measures related to sustainable development, investment facilitation, and cooperation in new and emerging sectors like renewable energy, food processing, and healthcare sectors. Potential exists for green capital (Green FDI) from the UAE because of the UAE’s own economic diversification policy and initiatives on green energy (UAE Energy Strategy 2050).  

The idea of green FDI is relatively new and there is no consensus on a single definition of the concept in the literature. This operationalisation is used because it enables the isolation of green FDI from aggregate FDI flows through greenfield investment data on a sectoral level, in a comparable manner to that used by other operationalisations. More broadly, FDI is an important source of funding for the long-term, direct, and stable connection between economies, and environmental investments related to technologies and processes have increasingly been a large and prominent component of FDI flows over the past decade. Financial flows from developed to developing countries for adaptation and mitigation have been analysed and FDI is the biggest source of finance, across the public and private sectors, for adaptation and mitigation. It can bring about the transfer of technological know-how and environmentally friendly industrial practices that can contribute to the development of renewable energy and other environmental development. This transfer is especially significant in the context of developing countries, with the technology being focused in developed countries in the Global North and FDI being a means of transferring it to less developed countries in the Global South (OECD, 2011). 

The empirical presence in favour of green FDI has grown very quickly. The scale and evolution of FDI over the last decade has established it as an important financing source for environmentally relevant technologies and processes, often referred to as Green FDI, and has solidified it as direct and stable link between economies. FDI represents 60% of climate related investment flows from developed to developing countries and is the biggest single source of public and private adaptation and mitigation finance. Data at sector level also show that FDI has been one of the biggest channels for the transmission of renewable energy technology, equipment and industry know-how to developing economies, with cross-border investment in renewables. This mode of technology transfer is particularly important for developing countries, since a large share of the IP and industrial capacity is owned by companies in the developed economies of the Global North, and FDI acts as a key channel for the transfer of such technology to the Global South (OECD, 2011). 

UAE contributes a modest share of India’s Green FDI. It reflects not only capital inflows but also investor confidence in the profitability and long-term potential of renewable energy and clean-tech projects. CEPA may have encouraged such investments by improving the investment climate and reducing uncertainty. However, factors such as ESG investing, government policies, and global climate commitments may also have played a significant role.  

Considering this background, it is pertinent to ask: Has CEPA really proved to be a catalyst for green FDI flows, especially to India in renewable energy, under its specific legal and institutional framework, or have they been driven by global decarbonization processes and unilateral national policy incentives? This is an important question because CEPA’s legal framework such as its investment protection mechanism, sustainability-related conditions, and sectoral-specific commitments was purportedly meant to enable exactly such cross-border green investment to flow.  

Therefore, this paper will analyse from the legal, economic and financial, and the geopolitical perspective, whether the growth in India-UAE green investment can be attributed to CEPA itself or whether it primarily reflects broader domestic and global developments in sustainable finance. By analysing investment trends, sectoral capital flows, and selected case studies, the research aims to assess CEPA’s role in shaping green investment decisions while distinguishing its impact from other economic and policy drivers. 

Literature Review  

India-UAE CEPA and Trade Impact Studies  

Verma (2025) analyses the economic impact of the India-UAE CEPA, 2022 on bilateral trade and seeks to highlight the effectiveness of CEPA by placing India in the post-liberalization trajectory of 1991. The study shows that CEPA accelerated bilateral trade volumes due to the growth in both traditional sectors like minerals, gems, fuels, as well as in aircraft components. Although rich in policy-oriented trade reporting, the paper lacks statistical hypothesis testing and econometrics literature. 

Saeel and Chandran (2025) examine how the India-UAE Comprehensive Economic Partnership Agreement (IUCEPA) has impacted the composition and extent of bilateral trade between the two countries. The paper used RCA, RTA, RC, and trade specialisation analysis to assess trade complementarity and cooperation potential and applied an augmented gravity model (FEVD and PPML estimation) to evaluate the IUCEPA agreement’s trade impact on both nations. Results show mineral fuels, oils, and related products have the highest trade potential, with CEPA projected to boost exports by 10.4% (FEVD) and 35.3% (PPML). Unlike India’s previous RTAs, CEPA shows promise, aligning with Ismail and Ahmed (2022), who found it caused 70% trade creation and 30% trade diversion, resulting in a positive consumer surplus. It also found that trade complementarity can drive mutual gains as tariffs phase out, though issues like gold and silver tariff concessions may weaken CEPA’s effectiveness unless renegotiated. The study concluded that the overall impact of the CEPA is positive, with the trade projected to increase to US$113 billion within five years of signing the agreement. Overall, the India-UAE CEPA offers valuable lessons for maximising trade potential in future agreements. 

Dhanush Prabha (2026)– The India–UAE Comprehensive Economic Partnership Agreement (CEPA), implemented on 1 May 2022, aims to strengthen economic integration by reducing trade barriers and expanding cooperation in trade, services, investment, digital trade, and intellectual property. The agreement eliminates customs duties, improving export competitiveness and lowering trade costs. The article suggests that these provisions may indirectly encourage cross-border investment by creating a more favourable business environment. However, it provides no empirical evidence on bilateral Foreign Direct Investment (FDI) flows after CEPA’s implementation. Therefore, while the article offers useful background on CEPA’s objectives and mechanisms, further empirical research is required to determine its actual impact on India–UAE bilateral FDI.  

Atri’s (2026) analysis is comparative in nature and widely discusses the structural vulnerabilities of India-ASEAN FTA 2020 in micro, small, and medium enterprises (MSME), exposed by the India-UAE CEPA 2022. Yet, the research gap persists as the paper tend to overlook the aspect of investment in the CEPA and does not cater to the question as to how foreign direct investment (FDI) inflows are driven by institutional protections to reduce the financial roadblocks that impede small firms. 

India-UAE FDI Analysis 

Hussain (2022) goes deeper into how CEPA is actually structured, pointing out that the agreement removes duties on 97% of India’s exports by volume and locks in a $75 Billion UAE commitment to Indian infrastructure. By 2022, UAE investment in India had climbed to around $18 Billion, $11.7 Billion of which was FDI – making the UAE the largest Arab investor in India. It’s a useful account of the agreement’s mechanics, but Hussain doesn’t test whether any of these commitments showed up as measurable FDI growth after the deal was signed.  

The study conducted by Kanojia et al. (2024) is methodologically sound as it uses structural variables for the measurement of macroeconomic changes after 2022 in the corridors between India and UAE. The study carried out by Kanojia et al. (2024) successfully elaborates on the way in which the CEPA led to an unexpected shift in relations between India and UAE, making the latter one of the best trading and investing partners as well as attracting more foreign investments. However, the authors did not take into consideration the impact of investment protection under the CEPA on the allocation of FDI in different sectors and the influence of geopolitical architectures on them. 

Noor and Noor (2024) have analysed the FDI flows between India and GCC countries during the period of 2001-22, using multiple methodologies including OLS and PPML estimators along with regressors to do the same. UAE was seen as one of the major sources of FDI for India, where there was an exceptional increase in FDI inflow during the year of 2020. It also showed that the FDI outflows towards UAE were showing significant fluctuation. With a small initial value of $1.02 million in the year 2001, there were some peaks and troughs during the course of time. FDI outflows reached its peak in 2021 at the level of $121.3 million where Jan’s figures were made based on estimates and not after CEPA figures. It also showed that there was a positive correlation between FDI and employment. This research concluded that over the past 20 years, FDI has been complementary to overall capital formation. 

Jan (2024) provides nearly identical figures: $17-$18 billion in total UAE investments, primarily focused on services, maritime transport, and energy industries, as well as the $1 billion NIIF-ADIA infrastructure fund. All this is presented by the author in the context of “50year partnership,” which is an attractive story, though still based on projections rather than post-CEPA figures. 

Anwer (2026) examines the India-UAE relations and how CEPA has strengthened them. The UAE is India’s third-largest trading partner and among the largest foreign investors. The UAE is fourth in FDI in FY24 after Mauritius, Singapore, USA and UK. The structural shift in bilateral trade under CEPA has pushed it to $100.06 billion in FY25 with non-oil trade reaching $37.6 billion in FY25. UAE continues to be the seventh-largest investor in India, and investment ties remain strong. CEPA has helped MSME’s by cutting tariffs, easing customs and opening up UAE markets for over 10,000 Indian products. Overall, the India-UAE relations remain robust and resilient.  

Green FDI Theory and Renewable Energy Cooperation  

Cima, Elena (2018)– This study “Promoting Renewable Energy Through FTAs? The Legal Implications of New Generation of Trade Agreements”. It discusses how the latest Free Trade Agreements (FTAs) promote renewable energy and analyse their legal implications. The research suggests that investment, protection and liberalization of trade, as well as technology transfer, flexibility in regulation, and specific cooperation mechanisms, lead to creating the proper environment for investment in renewable energy and achieving sustainable development. However, it should be noted that the article does not consider the India-UAE CEPA agreement, as well as provide any statistical data proving FDI attraction through FTAs. Therefore, the study has limited practical applicability, but it highlights the critical areas that FTAs should cover to promote sustainable development through attracting FDI.  

Kaur and Sandhu (2020)– The study by explores the macroeconomic dynamics of FDI in India’s renewable energy sector, power generation, and GDP growth for the period 2008 to 2018 with the help of descriptive statistics to capture the upward installation trend. However, structural policies on geopolitical level such as the India-UAE CEPA and trade agreements/bilateral investment treaties that influence FDI flows into green infrastructure are not covered in the study.  

Jaumotte, Kim, Pienknagura, and Schwerhoff (2024) undertake a research aimed at identifying factors affecting green FDI in EMDEs. To achieve this goal, the researchers use both econometrics and country regional case study approaches and investigate the relationships between the factors selected and growth in renewable energy investments. Specifically, the researchers observe that considerable FDI goes into countries with comprehensive climate policy, high institutional quality, and openness in terms of trade and capital flows. The main message to take from the article under discussion is that green FDI is attracted by stability and supportive environment in host countries. Furthermore, according to the authors, access to finance, institutional quality, and geopolitical risks account for the variations observed in FDI. 

Although the paper in question does not consider India-UAE Comprehensive Economic Partnership Agreement (CEPA) directly, it offers a valuable theoretical foundation for understanding how trade agreements may encourage investments with the help of domestic policies. Thus, the research suggests that CEPA alone is not likely to result in the growth of bilateral FDI in the absence of such attributes as institutional quality and certainty of regulations. Hence, the study can be used for examining the relationship between the changes in FDI of India-UAE countries after CEPA and the agreement itself.  

Verma and Shahanas (2025) examine how renewables energy commitments set by the Paris Agreement have changed the dynamics of the India-UAE Strategic ties. From India’s perspective, energy security is a major aspect of the relationship and from UAE’s perspective, remaining geopolitically relevant on the regional and global stage is important for it, which naturally pushes both the countries to expand their ties into renewables. UAE’s investments into India’s renewable energy sector supports India in achieving its renewable energy targets and positions UAE as an energy exporter, helping it advance its strategic interests. Thus, the renewable energy ties between the two nations complement each other by default.  

Parul Bakshi (2026)– The literature on Gulf sovereign wealth funds (SWFs) highlights the increasing role of UAE state-owned investment institutions in promoting global investment and sustainable development. Mapping Gulf Sovereign Wealth Funds in the Global Energy Transition explains that major UAE investors, including the Abu Dhabi Investment Authority (ADIA), Mubadala, and Abu Dhabi Developmental Holding Company (ADQ), have evolved from passive asset managers into strategic investors supporting industrial diversification, technology transfer, and clean-energy development. Their investments are oriented towards renewable energy, infrastructure, hydrogen, and climate technologies, while India has become a priority for them as an investment destination. The report also highlights the UAE’s interest in investing in India’s energy sector. Companies such as Greenko, Renew Power, Adani Energy Solutions, and Tata Power Renewable Energy have received attention from them. This information suggests the strength of the UAE’s position in India in the long run. At the same time, the report does not explicitly discuss the impact of the India-UAE Comprehensive Economic Partnership Agreement (CEPA) on bilateral FDI figures, although it highlights general information about investment relations between the countries. The evidence indicates that substantial UAE investment in India existed before CEPA, suggesting that the agreement likely strengthened an existing investment partnership rather than creating it. Therefore, post 2022 FDI growth should be evaluated alongside broader strategic and economic factors.  

Sectoral Impact  

Dasgupta (2026) examines the effect of CEPA on different economic sectors in India. The study concludes that CEPA contributed to large export growth in the gems and jewellery sector of India. This study uses prior Bayesian analysis set up with high posterior probability showing that CEPA has a significant positive trade effect on sectors where the depth of tariff concessions was greatest, among which the gems and jewellery sector is the greatest. This finding revealed the fact that it is India’s third-largest merchandise export sector and contributes around 7% of the country’s GDP, employing an estimated five million workers in both formal and informal sector (GJEPC, 2024). There is 36.9% more gross value added in post-CEPA period; average worker wages have increased by 4.3%; labour share of GVA decreased from 43.1% to 40.8% and workers capture 34% of the incremental value created in comparison with 43.1% of total value in the sector during the pre-CEPA baseline. Therefore, we can say that the gains from trade liberalization have been distributed unevenly in the post-CEPA period, thereby raising questions of the political sustainability of such agreements. This analysis was conducted for gems and jewellery sector, and no similar study has been conducted in renewable energy sector. 

Broader Strategic and Diplomatic Relations  

Shahnawaz & Mir (2025) use a very different perspective by looking at the relations between the two countries in neo-realist constructivist terms. In the process, they also manage to identify UAE as the fourth largest investor for India, using the same amount of $75 billion in infrastructure. The difference here is rather noticeable since other sources identify UAE as the ninth largest investor, which means that the figures aren’t comparable either because different metrics are being used or the time periods differ. Their focus is really on diplomacy and culture (CEPA, digital payments, the LCS system), not on quantifying FDI.  

Kumar and Ansari (2025) have examined India- UAE ties with a special focus on the bilateral trade and energy concerns. While oil trade remains a focal point of the relationship, both the countries have expanded their collaboration into gems and jewellery, renewable energy, maritime security, and counterterrorism. Although challenges like regional instability and trade imbalances do persist. To realize the vision of India’s West Asia Policy and UAE’s ambition to become a global logistics and innovation hub, ties must move towards sectors like green hydrogen, defence manufacturing, and digital security.  

Bochner (2025) offers a valuable analysis of the India-UAE alliance, highlighting the idea that religious tolerance is a means of exercising soft power and economic approach. The paper describes how the multi-governance structure of UAE enables strong cooperation in fields like renewable energy and technology. The use of thematic analysis allows Bochner to challenge the division between the development in economics and the cultural identity of nations, emphasizing that these two factors depend on each other. As a result, the research identifies this approach as the example of modern diplomacy, where emerging nations could benefit from diversity.  

Agarwal (2025)– India’s footprint in West Asia used to be tied down by old geopolitical balancing acts, but the post-9/11 years really forced New Delhi to rethink its foreign policy playbook. Shifted from the passive “Look West” mindset to a much more deliberate “Link West” strategy back in 2014, India quickly pinned down the UAE as a main anchor for its regional goals. That bond levelled up to a Comprehensive Strategic Partnership in 2017, built on four sturdy legs: business and investments, keeping the energy flowing, looking out for the massive Indian diaspora, and teaming up on security. Things kicked into a higher gear when the Comprehensive Economic Partnership Agreement (CEPA) dropped in May 2022, it’s essentially the nuts-and-bolts framework meant to supercharge bilateral trade while pushing joint efforts forward in tech spaces like fintech, space exploration, and cybersecurity. In addition to this, the alliance has transcended beyond the conventional purchase of goods to ensure that the UAE is meeting India’s requirements of energy and is simultaneously expanding collaboration on defence and counterterrorism. In the light of India’s rising role on the international stage, demonstrated through its G20 presidency, the UAE has emerged as an irreplaceable ally. The “golden age” of the bilateral relationship is characterized by an inflexible synchronization of economic and diplomatic interests of both countries in the current multipolar world order. 

Research Methodology  

This paper follows an explicitly qualitative descriptive-analytical method of analysis, based on the triangulation of secondary data (not economometric or formal statistical estimation). Attribution is calculated using a system of ‘counterfactual comparative logic,’ which sees causal analysis as a systematic process of imagining what would have happened had there been no CEPA. In this context, two approaches to the attribution issue can be considered: either CEPA has caused the Green FDI, or Green FDI has arisen as a side effect of investment flows that would have occurred regardless of CEPA. 

Firstly, legal-textual analysis of the CEPA agreement is done in order to see whether there is a causal mechanism by which green capital could be channelled into India through this treaty (Government of India & Government of the United Arab Emirates, 2022).  

Secondly, the comparative-empirical method consists of cross-checking the timeline of the CEPA agreement with the investment data from DPIIT Fact Sheets, which contain information about foreign equity inflows in FDI by sectors and by country (PIB, 2022a, 2022b). 

Additionally, there is an analysis of the ranking of the UAE in India’s Non-Conventional Energy FDI as compared with other non-CEPA partners like Singapore, Mauritius and Netherlands, which are the top partners in terms of green FDI in India (Business Standard, 2023). This will help us understand if the trajectory of green FDI is particular only to the partners of India under the CEPA agreement or reflects a general trend around the globe. 

Furthermore, this paper includes a case study analysis of individual transactions such as investment by Masdar in Hero Future Energies (Mercom India, 2023; The National, 2019); BlackRock and Mubadala investment in Tata Power Renewable Energy Limited (Arab News, 2022; Business Standard, 2022); Green Energy Investment Holding RSC (subsidiary of International Holding Company (IHC)) investment in Adani Green Energy (Business Standard, 2022b, 2022c); and the memorandum of understanding between the government of Rajasthan and UAE for a 60 GW renewable energy project (Ministry of Investment United Arab Emirates, 2024). In each case, the nature of the investors (sovereign wealth fund or private companies) is examined to determine whether CEPA was instrumental in making the decision or if it was an independent commercial decision which may have happened even without CEPA.  

The paper does a structured review of the existing literature on India-UAE trade and investment relations. It does not attempt regression or gravity modelling because of the short time-series of post-CEPA (2022-2026) and the small number of large transactions involved.   

Analysis 

India-UAE CEPA (Comprehensive Economics Partnership Agreement)  

The India-UAE CEPA has been a historic and strategic agreement which has helped in the growth of bilateral relations. It has contributed significantly to bilateral trade, which has surpassed USD 100 billion in FY 2024-25, much before the 2030 target (PIB, 2024) and in 2024, non-oil trade reached USD 65 billion, representing a 19.7% increase from the previous year. During the visit of the President of UAE to India in January 2026, both countries decided to target USD 200 billions of bilateral trade by 2032 (PIB, 2026). Sectors benefitting most from CEPA are the labour-intensive sectors such as engineering goods, textiles, footwear, pharmaceuticals, and agriculture which have also seen growth with tariff elimination of around 80% for traded products. In the medium term, both governments are focused on areas such as investment in pharmaceuticals, food processing, fintech, renewable energy, digital commerce, logistics, healthcare, and startups/innovation, which falls within the UAE’s D33 economic agenda and India’s manufacturing and MSME growth goals.  

UAE’s Investments in India with a Special Focus on the Renewable Energy Sector  

UAE is the third largest bilateral trade partner of India and also the seventh biggest foreign investor responsible for cumulative FDI equity inflow of worth nearly USD 25,586 million contributing about 3.25 percentage of the total cumulative FDI equity inflow in the period between April 2000 and March 2026 (DPIIT, 2026). Conversely, India is UAE’s second largest trading partner. The trade between the two countries has largely been hydrocarbon-based with investments in other major sectors like gems and jewellery, gold, infrastructure, etc. But since the signing of the CEPA agreement the dynamics of trade have changed between India and UAE.  

Source: DPIIT Fact Sheet, April 2000- March 2026  

• Non-Conventional Energy ranks as India’s 9th largest FDI-receiving sector, attracting USD 24,918 million (₹1.82 lakh crore) in cumulative FDI equity inflows over the same period representing 3.16% of India’s total cumulative FDI equity inflows.  

• More money is now being invested in non-conventional energy sources than in traditional power sources in India.   

• In fact, the amount of money invested in non-conventional energy is higher than the total amount of money invested in traditional power sources, which is around $20.09 billion.   

• This shows that non-conventional energy has become the preferred choice for foreign investors in India’s electricity sector.  

• In the first nine months of FY 2025-26 (April–December 2025) alone, NonConventional Energy attracted USD 2.54 billion in fresh FDI equity inflows.  

• Non-Conventional Energy has attracted only about one-tenth of the cumulative foreign equity received by the Services and Computer Software & Hardware sectors combined (USD 248.67 billion).  

This underscores the continued concentration of foreign capital in mature, services-led sectors, while highlighting substantial headroom for expanding international investment into India’s renewable-energy transition.  

Source: FDI synopsis on country UAE, DPIIT Fact Sheet, January 2000- December 2024  

Geographically, its heavily concentrated: Gujarat alone soaks up 48.05 percent of UAE investment, with Maharashtra pulling in another 27.03 percent, followed by Delhi (12.89.%), Karnataka (4.26%), and Haryana (2.22%).  

Investment in Companies  

• On the renewable energy side, a few deals stand out. Masdar invested USD 150 million in Hero Future Energies back in 2019.  

• Mubadala has also backed Tata Power Renewables, and the Green Energy Investment Holding RSC Limited invested 3,850 crore (about 497.94 million USD) in Adani Green Energy Limited as an equity investment.  

• There’s also a broader MoU signed alongside the CEPA, targeting 60 GW of joint solar and wind power projects, which was later formalised by the Government of Rajasthan and UAE in October 2024, though that number feels more like a stretch goal than a firm commitment at this point. Still, the direction is clear: solar, wind, green hydrogen, and renewable infrastructure look set to remain the UAE’s focus for investment into India, largely funnelled through sovereign wealth funds and big infrastructure projects.  

• Thus, UAE-linked entities have made concentrated, high-conviction investments into a small number of Indian renewable platforms rather than a diversified portfolio.  

Although the UAE contributes a modest share in India’s Green FDI, its investments have an impact, focusing on large-scale, sovereign-backed projects that support India’s long-term clean energy transition. 

Green FDI Coming into India  

The Renewable Energy/ Non-Conventional Energy Sector receives 2.96% of total cumulative FDI coming into India between January 2000 and December 2024. If we divide the Nonconventional Energy Sector into two parts, i.e. Solar Energy, which receives 1.63% of this investment and other Non-Conventional Energy, which gets 1.33% of it, UAE ranks fourth in terms of the FDI equity inflow into this sector and accounts for 7.24% of it. 

Top Five Investors in the Non-Conventional Energy Sector  

Source: FDI in Non-conventional Energy Sector, DPIIT Fact Sheet, January 2000- December 2024  

A point to be noted here is that India Briefing’s Investor Country Ranking for Green FDI in FY 2023 does not list UAE among the top source countries, which are Singapore, Mauritius, Netherlands and Japan, of Green FDI. This proves that UAE’s investments are concentrated in a few large, individually negotiated transactions rather than broad portfolio FDI, hence the commitments made under CEPA have not actually materialised so far.  

Could These Investment Have Happened Independent of CEPA?  

What the existing data proves is that CEPA has in fact helped in shifting the focus of bilateral trade from just a few sectors, like oil, gems and jewellery, etc., to a diversified investment strategy. But at the same time, investment into the Renewable Energy sector has not translated into broad based Green FDI. The investments are individually negotiated among large companies which fail to acquire a stake in the project and thus not contribute to the transfer of technological knowhow which is what Developing countries like India need the most (OECD, 2011). This will make it difficult to build our Renewable Energy Sector and rob us of the multiplier effect that it will have, for instance, generating employment, reducing pollution, less disease burden, building allied sectors (EV, manufacturing, photovoltaics, etc.).  

Will Large Company Deals help?  

The counter view by the other side might be that the investments currently taking place are enough to meet our renewable energy targets and commitments. This argument also has merit as we may be able to fulfil the said commitments through such deals negotiated behind closed doors among large companies. But the question that arises is- Is the goal just to meet targets? Will such investments be able to help establish our renewable energy sector and equip it with the necessary technological knowhow to make us self-reliant and thus contribute to our development and generate employment? Will these deals be able to come out of their closed doors and make an impact on ground that Green FDI can? These are genuine questions that need valid explanations to address the deficit that is not being filled by large company deals.  

Further Potential of India-UAE Renewable Energy Relations  

India and UAE are actively trying to move towards environmental sustainability. Collaboration in Green Hydrogen exhibits a great potential for both. The UAE National Hydrogen Strategy and India’s Green Hydrogen Mission though having their respective national contexts presents significant complementarity that can be leveraged for mutual benefit. UAE aims to become the top global producer of low carbon hydrogen by 2031 in both blue hydrogen (from natural gas with carbon capture utilisation and storage or CCUS) and green hydrogen (from renewables). It focuses on decarbonising its domestic industries and becoming a key energy exporter. In contrast, India wants to establish itself as the global hub for Green Hydrogen production, usage, and export with a special focus on producing hydrogen from renewables. Thus, India can be a supplier of cost competitive green hydrogen to UAE and UAE with its established infrastructure can facilitate in global distribution of Indian Green Hydrogen (ORF, 2025). The India UAE CEPA can support in this joint effort and help in early deployment of the technology and both the countries in their distinct energy transitions by relying on Green FDI.  

Further if we look at UAE and India’s natural complementarity we will find why both the countries are most suited to take advantage of their strategic alignments. Energy security has long been a crucial pillar for both the countries in the relationship. Moreover, India wishes to become a global leader in the renewable energy sector. Hitherto the relations between the two countries have been majorly guided by the oil sector. The UAE is a major fossil fuel exporter, but it is now pivoting towards the clean technology and renewable energy sector (UAE Energy Strategy 2050), considering that the future is green energy. The UAE has invested around $163 billion in renewables around the world and wants to be a pioneer in its region and position itself as a leader in clean energy and climate action, thus helping it in staying geopolitically relevant. This creates a natural complementarity in the ties. The UAE can increase its investments, through the FDI route, into the renewable energy sector of India with its sovereign wealth funds. This will help the UAE in diversifying away from the oil sector and support India in accessing necessary technological knowhow, help it in building its Renewable Energy Sector, generate employment and thus contribute to our development. Furthermore, we will be able to meet our renewable energy targets, such as 60% of cumulative electric power installed capacity from non-fossil fuel-based energy sources, keeping in mind the USD 10 trillion investment that India needs to reach Net Zero by 2070 (PIB, 2026) and thereby ensure its energy security (Verma and Shahanas, 2025). Thus, both the nations can benefit mutually from such an arrangement and move towards a secure Green future.  

Discussion  

The observation that there has been rapid growth in the level of trade between India and the UAE, but at the same time the Green FDI pattern is still concentrated shows that liberalization policy is not enough to influence investors’ choices of sectors to invest. Indeed, the CEPA agreement has made progress in making general investment conditions better, but at the same time the investments in renewable energy of India are still concentrated. This shows that whereas preferential trade terms are good economic conditions for attracting investment, the effects of Green Foreign Direct Investment on economic environment such as technology transfer, technology transmission without pollution and industrial multiplier effects have not been seen yet.   

The findings confirm past empirical literature stating that CEPA agreement has made progress in promoting the existing ways of economic integration but did not make much difference in the way of investment. They also confirm scholarly research findings which state that although trade agreements help in investments by improving business environment, in most cases alone they cannot ensure long-term FDI. In this regard, the concentration of investments in the area of renewable energy after 2022 can be considered a sign of the selectivity of investments of sovereign states but not a reflection of any fundamental shifts in the field of investments in clean energy. 

While it is essential to focus on the immediate effect in terms of investments, the analysis shows that CEPA is supposed to make a considerable institutional contribution as well. Indeed, the agreement comprises provisions related to renewable energy, digital trade, logistics, food processing, and green hydrogen that can play an enabling role concerning the implementation of India’s and the UAE’s plans in terms of energy transition and diversification, respectively. In this way, it can be argued that the institutional contribution of CEPA is evident. The point is not in promoting current levels of green investments but rather about creating certain conditions for further deepening of cooperation between the countries. The distinction between the two types of contributions of CEPA, one of which is rather significant while the other one is not, is quite crucial by itself since it proves that they occur at different stages of development.  

Conclusion  

In this research, the intent was to determine if the CEPA between India and UAE had indeed been responsible for the Green FDI that has been witnessed within India’s renewable energy industry, or if it is a completely independent phenomenon driven by global trends in decarbonization. This is important since there is a heavy reliance on foreign investments to achieve India’s objectives in its renewable energy plans.  

Through the use of a qualitative, descriptive secondary data methodology and legal analysis of CEPA, validation of the timelines against DPIIT and PIB databases, comparison of FDI source country ranking, and analysis of four major renewable investments of UAE, the research discovered that UAE is ranked 7th in terms of FDI sources for India and fourth in unconventional energy investments without any green FDI rankings. The implication of this finding is that the UAE’s capital movement is sporadic in nature and specific to each deal with no technology transfer or employment effects.  

This is important theoretically since the research findings contradict the assumption that trade agreements have the effect of triggering sectoral FDI. This finding is relevant in the body of literature that differentiates between trade facilitation and investment causation. Practically, the research shows that CEPA has diversified trade relations without the equivalent green investment integration, with the green hydrogen being the most promising future convergence area for the two countries.  

Limitations of the analysis include use of secondary data, lack of use of regression or gravity models, and use of short-term data sets, thus precluding any claims of causation or long-term impacts. In spite of the above limitations, the paper provides an up-to-date review of the issue at hand. Further research should use gravity models using long-term data series and investor surveys.  

Acknowledgement  

This paper is a collaborative effort by all and we would like to acknowledge the contributions of the people that helped us in writing this paper. Their inputs were important in enhancing the quality and depth of this research paper.  

We would like to thank Tanishka Chaurasia for her contribution to parts of the analysis section and the discussion section of the paper. We would also like to thank Areeb Hussain for his contribution to some sections of the Introduction and Literature Review. Our thanks also go to Habeeb Lukman for his contribution to some portions of the Literature Review.

Reference

Introduction  

1. ATB Legal. (2026, February 17). India-UAE trade nearly doubles in three years following CEPA signing. https://atblegal.com/blog/india-uae-trade-doubles-after-cepa/
2. Defining and Measuring Green FDI (2011) https://www.oecd.org/content/dam/oecd/en/publications/reports/2011/09/defining-and-measuring-green-fdi_g17a2012/5kg58j1cvcvk-en.pdf 
3. IBEF. (2025, January 3). India’s renewable energy boom: The power of solar and beyond. India Brand Equity Foundation. https://www.ibef.org/research/casestudy/india-s-renewable-energy-boom-the-power-of-solar-and-beyond
4. PwC. (2022). The UAE-India Comprehensive Economic Partnership Agreement. https://www.pwc.com/m1/en/tax/documents/2022/the-uae-india-comprehensiveeconomic-partnership-agreement-enters-into-force.pdf
5. Silverstein, K. (2025, February 9). Masdar’s solar-plus-battery project will redefine reliable energy. Forbes. https://www.forbes.com/sites/kensilverstein/2025/02/09/masdars-solar-plus-batteryproject-will-redefine-reliable-energy/
6. SolarQuarter. (2026, May 6). India’s solar sector attracts $2.37 billion FDI, defies broader energy investment decline. https://solarquarter.com/2026/05/05/ewec-andmasdar-sign-strategic-deal-to-accelerate-uaes-renewable-energy-growth/
7. Swarajya. (2026, May 1). India-UAE CEPA pushes trade past $100 billion; new bilateral trade goal of $200 billion set for 2032. https://swarajyamag.com/economy/indiauae-cepa-pushes-trade-past-100-billion-newbilateral-trade-goal-of-200-billion-set-for-203 

Literature Review  

1. Verma, Twarita, (September 10, 2025) An Analysis of Economic Impact of the UAEIndia CEPA On Bilateral Trade: A Data Driven Study Over the Years. Available at SSRN:http://dx.doi.org/10.2139/ssrn.5656870
2. Atri, Vikramaditya, How international trade deals (India-ASEAN FTA, India-UAE CEPA) affect MSME’s How India-ASEAN FTA (2010) and India-UAE Comprehensive Economic Partnership Agreement (2022) Affect Micro, Small, and Medium Enterprises (MSMEs) in India (September 24, 2025).  http://dx.doi.org/10.2139/ssrn.6319680 
3. Ankit Kanojia, Linda, N., & Verma, P. (2024). The impact of the UAE-India CEPA deal on trade and investment flows: A comparative and econometric analysis. Saudi Journal of Economics and Finance, 8(05), 139-148. https://doi.org/10.36348/sjef.2024.v08i05.002  
4. Kaur, R., & Sandhu, Dr. V. (2020). FDI and renewable energy in India. Gedrag & Organisatie Review, 33(02). https://doi.org/10.37896/gor33.02/024
5. Hussain, Z. (2022). Deepening ties of India-UAE relations: Role of CEPA. International Journal of Trade & Commerce-IIARTC, 11(2), 258-277. https://doi.org/10.46333/ijtc/11/2/1 
6. Jan, L. (2024). Emerging dynamics of India-UAE economic and strategic relations. International Journal of Applied Social Science, 11(11 & 12), 608-613. https://doi.org/10.46333/ijtc/11/2/1
7. Shahnawaz, M., & Mir, R. Y. (2025). Strategic convergence in the Arabian Gulf: Evaluating India-UAE partnership post 2014. Indian Journal of Social Science and Literature, 4(4), 19-24. https://doi.org/10.54105/ijssl.C1166.04040625
8. Saeel and Chandran (2025). Trade Potential of India UAE Comprehensive Economic Partnership Agreement (CEPA). Journal of Economic Cooperation and Development, 46, 1 (2025), 27-54. https://shorturl.at/4YnTR
9. Noor and Noor (2024). A Gravity Model Approach for Determining Foreign Direct Investment Flows between India and the Gulf Cooperation Council (GCC) Countries. Saudi Journal of Economics and Finance. https://saudijournals.com/media/articles/SJEF_87_220-229.pdf    
10. Anwer (2026). India and United Arab Emirates (UAE): Challenging Trends. Cognitive Thinking: An International Journal of Interdisciplinary Studies. https://shorturl.at/IsPqx
11. Dasgupta (2026). CEPA, Trade Gains, and the Distribution of Labour Returns: Evidence from India, 2021-2024. SSRN: https://shorturl.at/8zNi8   
12. Bochner, Bridging faiths and economies: The dynamic tolerance nexus between the UAE and India (2025). https://www.emiratesscholar.com/system/publish/231225121220939.pdf 
13. Kumar & Ansari, India-UAE Relations: Bilateral trade and energy concerns (2025). https://scientificresearchjournal.com/wp-content/uploads/2025/12/social-science-vol12-971-979.pdf  
14. Verma & Shahanas, India-UAE Energy Relations in the age of Renewables: A study from a geopolitical perspective (2025). https://doi.fil.bg.ac.rs/pdf/journals/iipe_ria/2025-1195/iipe_ria-2025-76-1195-4.pdf  
15. Agarwal, India’s Strategic Partnership with the UAE: A key pillar of India’s outreach in West Asia (2022). https://www.jstor.org/stable/e48514396  
16. Bakshi, Mapping Gulf sovereign wealth funds in the global energy transition (2026). https://orfme.org/wp-content/uploads/2026/02/ORF-ME_Report_Mapping-SovereignWealth-Funds.pdf   
17. Cima Elena, Promoting renewable energy through FTAs? The legal implications of a new generation of trade agreements (2018). 10.54648/trad2018029  
18. Jaumotte et al, Policies to foster Green FDI: Best Practices for emerging market and developing economies (2024). https://www.imf.org/-/media/files/publications/staffclimate-notes/2024/english/clnea2024004.pdf   
19. Prabha, India-UAE CEPA benefits for exporters (2026). https://www.incorpx.io/blog/india-uae-cepa-benefits-exporters-gst#india-uae-cepa-vsother-indian-ftas   

Analysis  

1. Balaram Menon, & Balaram Menon. (2025, September 4). UAE Minister of Foreign Trade Al Zeyoudi meets Indian Business Council to boost CEPA gains. Gulf News: https://gulfnews.com/business/economy/uae-minister-of-foreign-trade-al-zeyoudimeets-indian-business-council-to-boost-cepa-gains-1.500256798
2. Bitwize – http://bitwize.com.lb. (n.d.). UAE-India CEPA at four: Bilateral trade crosses $100 billion for second year, partners target $200 billion by 2032. Times of Oman. https://timesofoman.com/article/172089-uae-india-cepa-at-four-bilateral-tradecrosses-100bn-for-second-year-partners-target-200bn  
3. Briefing, M. E. (2025, April 16). UAE-India CEPA at three years: Trade and investment Growth, opportunities. Middle East Briefing. https://www.middleeastbriefing.com/news/uae-india-cepa-trade-and-investmentopportunities/  
4. CEPA shifts India-UAE trade into high gear. (2025). Law.asia. https://law.asia/indiauae-cepa-trade-agreement/  
5. India-UAE trade surges 37% under CEPA as partnership targets $200bn. (2026). Arabian Business. https://www.arabianbusiness.com/finance/economy/india-uaetrade-surges-37-under-cepa-as-partnership-targets-200bn  
6. Joint Statement: Visit of President of the UAE, His Highness Sheikh Mohamed bin Zayed Al Nahyan, to India. (n.d.). PIB (2026). https://www.pib.gov.in/PressReleasePage.aspx?PRID=2216270&reg=3&lang=1  
7. India and UAE aspire to expand bilateral trade to USD 100 billion, PIB (2024). https://www.pib.gov.in/PressReleasePage.aspx?PRID=1994986&reg=48&lang=2  
8. FDI Synopsis on country UAE- DPIIT (2024). https://www.dpiit.gov.in/static/uploads/2025/12/51fa5f862ea2fcaa12c993ebe901d58f.pdf
9. Fact sheet on FDI Inflow- DPIIT (2026). https://www.dpiit.gov.in/static/uploads/2026/06/41192ca92c1de34eb064800fbffa0379.pdf
10. FDI in Non-Conventional Energy Sector- DPIIT (2024). https://www.dpiit.gov.in/static/uploads/2025/12/516c1c465fd2c7ec41613e849a206c84.pdf
11. India-UAE CEPA: Key gains for exporters, MSMEs, Business travellers (2022). https://www.leaglobal.com/resource/india-uae-cepa–key-gains-for-exporters–msmes-business-travelers.html  
12. The India-UAE Partnership in Next Generation Energy Sectors (2025). https://orfme.org/research/india-uae-partnership-in-next-generation-energy-sectors/  
13. UAE-India comprehensive economic partnership agreement – ministry of Economy UAE. (2025). In Ministry of Economy UAE. https://www.moet.gov.ae/en/cepa_india  
14. Decoding CEPA: Unpacking the India-UAE comprehensive economic partnership agreement – global council for the promotion of International trade. (2022). https://gcpit.org/decoding-cepa-unpacking-the-india-uae-comprehensiveeconomic-partnership-agreement/  

Research Methodology  

1. Arab News. (2022, April 17). Mubadala and BlackRock to invest $525m in Tata Power’s renewable energy arm. https://www.arabnews.com/node/2064821/businesseconomy  
2. Business Standard. (2022a, April 18). BlackRock, Mubadala to invest Rs 4,000 crore in Tata Power Renewables. https://www.business-standard.com/article/newscm/blackrock-mubadala-to-invest-rs-4-000-crore-in-tata-power-renewables122041800385_1.html  
3. Business Standard. (2022b, May 17). Abu Dhabi’s IHC completes Rs 15,400 cr investment in three Adani companies. https://www.businessstandard.com/amp/article/companies/abu-dhabi-s-ihc-completes-rs-15-400-crinvestment-in-three-adani-companies-122051700598_1.html  
4. Business Standard. (2022c, May 3). Adani Transmission gets nod for Rs 3,850 cr investment by Abu-Dhabi firm. https://www.businessstandard.com/amp/article/companies/adani-transmission-gets-nod-for-rs-3-850-crinvestment-by-abu-dhabi-firm-122050300978_1.html  
5. Business Standard. (2023, October 4). Abu Dhabi-based IHC increases stake in Adani Enterprises to 5.04%. https://www.business-standard.com/companies/news/abu-dhabibased-ihc-increases-stake-in-adani-enterprises-to-5-04-123100301233_1.html
6. Government of India & Government of the United Arab Emirates. (2022). Comprehensive Economic Partnership Agreement between the Government of the Republic of India and the Government of the United Arab Emirates. https://www.moet.gov.ae/documents/20121/1347101/Final+Agreement_UAE+India+CEPA.pdf 
7. Mercom India. (2023, March 19). UAE-based Masdar backs India’s Hero Future Energies with $150 million investment. https://www.mercomindia.com/uae-masdarindia-hero-future-energies-150-million-investment  
8. Ministry of Investment, United Arab Emirates. (2024, October 23). UAE and the Government of Rajasthan sign investment memorandum to explore 60 GW renewable energy project in India. https://www.investuae.gov.ae/announcement/uae-and-thegoverment-of-rajasthan-sign-investment-memorandum-to-explore-60-gw-renewableenergy-project-in-india  
9. Press Information Bureau. (2022a, March 28). Comprehensive Economic Partnership Agreement (CEPA) between India and the United Arab Emirates (UAE) unveiled. Government of India, Ministry of Commerce and Industry. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1810279
10. Press Information Bureau. (2022b, May 1). India-UAE Comprehensive Economic Partnership Agreement (CEPA) enters into force. Government of India, Ministry of Commerce and Industry. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1821785  
11. The National. (2019, November 12). Abu Dhabi’s Masdar takes stake in India’s Hero Future Energies. https://www.thenationalnews.com/business/energy/abu-dhabi-smasdar-takes-stake-in-%20mmjindia-s-hero-future-energies-1.936244