Picture Courtesy: WAM
The United Arab Emirates (UAE) and India had signed a trade agreement to decrease import taxes on the majority of Indian exports to the UAE.
After the United States and China, the UAE is India's third-largest trading partner in the world.
It is also India's ninth largest source of FDI, with $17 billion invested, $11.67 billion of which is in the form of FDI. Moreover, around 35 lakh people of Indian origin live in the UAE.
It is evident that the two countries are at a historic significance this year. The UAE is celebrating its Year of the 50th and has laid out its vision for the next 50 years of growth. While India is celebrating "Azadi Ka Amrit Mahotsav" on the 75th anniversary of its Independence; and is marching ahead on its long-term development journey with renewed vigour and enthusiasm.
The Comprehensive Economic Partnership Agreement (CEPA) is the first significant trade agreement signed by the Modi administration since taking power in 2014.
Commerce and Industry Minister of India, Piyush Goyal and UAE Economy Minister, Abdulla bin Touq Al Marri signed the agreement in New Delhi.
The agreement intends to enhance the export of diamonds, jewellery, and clothes to the UAE in particular, in addition to lowering import charges.
Most Indian Exports will be Duty Free
Nearly 80% of India's exports to the United Arab Emirates will be duty-free, as per the agreement.
Precious gems and jewellery, medicines and medical devices, education, technology start-ups, infrastructure development, financial markets and services, oil and gas, renewables, advanced technologies, aviation, defence, and food production are among the industries that might gain.
India's annual exports worth roughly $26 billion, which are now subject to a 5% import charge in the UAE, are expected to benefit.
The 5 Year Plan
In the next five years, CEPA will help increase total trade from $60 billion to $100 billion. Prior to the pandemic outbreak, trade between the two nations was anticipated to be worth $59 billion in 2019-20.
Both countries collaborated during the pandemic in vital areas like as healthcare and food security.
They're also bolstering their collaboration in new areas including renewable energy, start-ups, and financial technology.
The majority of the sectors included by the pact are labor-intensive, and it is expected that when bilateral trade grows to $100 billion, the pact will create at least 10 lakh jobs for young people.
While the UAE is negotiating trade agreements with as many as eight countries, the pact with India is both economically and strategically significant.
In addition, the UAE has pledged to ease market access and regulatory approval for Indian pharmaceutical and medical products within 90 days.
Quick UAE-India Negotiations
CEPA is scheduled to take effect in the first week of May, according to Piyush Goyal. Since its official introduction in September 2021, negotiations on the contract have taken only 88 days to finish.
India’s Prime Minister, Narendra Modi is expected to sign the agreement on his trip to the United Arab Emirates and Kuwait.
Free trade, digital economy, government procurement, and strategic sectors are among the subjects covered in the 880-page document.
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