UAE-Italy: Enhancing UAE’s access to European markets with $40B investment

• The UAE is making big money moves—investing $40 billion into Italy across AI, Data centres, clean energy, rare earth minerals, and even underwater tech.

• This is part of 40 new agreements signed during President Sheikh bin Zayed Al Nahyan’s visit to Rome.

UAE and Italy’s game-changing partnership

The United Arab Emirates (UAE) is making a significant economic move by investing $40 billion in Italy.

This massive deal, signed during UAE President Sheikh Mohamed bin Zayed Al Nahyan’s visit to Rome, spans multiple sectors,

• Artificial intelligence (AI),
• Data centers,
• Renewable energy,
• Rare earth minerals,
• Defense.

Let’s break down the key aspects of this strategic alliance.

Defense & Security: A new strategic alliance

Both nations will collaborate on joint military production, cybersecurity, and counter-terrorism efforts.

This could involve technology transfer and co-manufacturing of advanced defense equipment, such as drones, surveillance technology, and weaponry.

Italy’s decision to lift arms embargoes on the UAE and Saudi Arabia highlights its growing openness to Gulf partnerships.

Africa-focused investments 

A significant portion of this deal extends to Africa, aligning with Italy’s Mattei Plan, which aims to boost African economies and reduce migration to Europe.

The UAE’s financial backing will help fund infrastructure projects, energy developments, and job opportunities in African nations, reinforcing Italy’s broader strategy to stabilize migration patterns.

Also read: Bahrain-UAE Double Tax Treaty to be signed in 2024: Exciting news for businesses in both countries

Energy collaboration

Italy, the UAE, and Albania will jointly work on an ambitious undersea electricity cable project in the Adriatic Sea.

This initiative is set to enhance energy security and optimize power distribution between Europe and the Middle East.

Additionally, Italian energy giant Eni has partnered with UAE firms MGX and G42 to build gas-powered data centers integrated with carbon capture technology.

Big part of this collaboration – UAE’s expansion into European markets

A major aspect of this partnership is Italy assisting the UAE in gaining broader access to “European markets”.

The UAE, already a dominant trade hub between Asia and Africa, now it wants to lock in Europe.

Means? The UAE wants a bigger slice of Europe’s markets, and Italy is backing them up.

How? By helping the UAE push for a Comprehensive Economic Partnership Agreement (CEPA) with the European Union! 

So, What’s a CEPA?

A VIP pass for trade—it’s a bilateral free trade agreement that removes barriers between two economies.

If the UAE secures this agreement with the EU, it would benefit from:

• Lower tariffs – Reducing the cost of imports and exports
• Market access – Allowing UAE businesses to operate more freely in the EU
• Investment protection – Creating a safer and more attractive investment environment
• Smoother movement of goods, services, and people – Facilitating business operations

UAE’s CEPA Expansion Strategy

The UAE has already secured CEPA agreements with:

• India
• Indonesia
• Israel
• Türkiye
• Cambodia

With ongoing negotiations extending across Asia, Europe, Africa, and South America!

Also read: UAE to be delisted from FATF “grey list”

Italy is fully invested in this partnership for multiple reasons?

• Growing UAE-Italy trade – Italian investments in the UAE surged by 50% over the last five years, with non-oil trade reaching $11.7 billion in 2023.
• Italy as UAE’s gateway to the EU – Italy’s strategic position makes it an ideal partner for facilitating the UAE’s entry into European markets.
• Economic diversification – By aligning with the UAE, Italy strengthens its trade and investment portfolio.

UAE-Italy Relation, historic milestone

More than 40 agreements were signed, covering economic cooperation, defense, nuclear energy, space, and cultural heritage.

The deal also extends to cybersecurity, with both nations committing to joint exercises and partnerships against ransomware threats.

Italian Prime Minister Giorgia Meloni called this agreement transformative, stating,

“It will turn distant partners into allies who share a key part of their journey.”

What this means for Indian trade

India already enjoys a CEPA with the UAE, leading to a 30% surge in non-oil trade in 2023.

If the UAE-EU CEPA materializes, it could create new opportunities for Indian businesses operating in Europe via UAE trade routes.