Marking a new era in bilateral trade, India and the United Arab Emirates (UAE) signed a Comprehensive Economic Partnership Agreement (CEPA). The two countries entered into a pact through a virtual summit attended by Prime Minister Narendra Modi and HH Sheikh Mohammed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi.
After US and China, UAE is India’s third-biggest trading partner. With CEPA, the bilateral trade between India and the UAE will soar from $60 billion to $100 billion in the coming five years. Moreover, the trade agreement will render 90% of India’s exports duty-free – that is, $26 billion worth of Indian products that UAE currently levies 5% of import duty.
Commerce and Industry Minister Piyush Goyal described the trade pact as a win-win deal. He said the agreement moves the relationship between UAE and India from economic dimensions to a deep and enduring strategic partnership.
Industries to benefit from the Comprehensive Economic Partnership Agreement include food and agriculture, gems and jewelry, pharma and medical equipment, textiles, engineering products, and automobiles.
The trade ties are said to grow further in 5-10 years with goods including electronics, chemicals, petrochemicals, articles of stones, cement, ceramics, and machinery by a trade value of an additional 9% are likely to get duty free access.
In addition, India would expedite work on a dedicated investment zone for UAE companies and JVs. At the same time, the Emirates would establish a dedicated India Mart in Jebel Ali Free Zone.
For India, UAE would serve as a gateway to Gulf countries, African nations, and East Asia. Meanwhile, India would be a Gateway to entire Asia for the Emirates.
The increase in bilateral trade and mutual investments will create 140,000 jobs in UAE and more than a million in India, said Thani Bin Ahmed Al Zeyoudi, UAE’s Minister of State for Foreign Trade.
UAE is also planning to increase its investments in India, which will benefit the Indian industry, particularly startups and small and medium enterprises. It will have a huge impact on exports, re-exports, and then import of commodities.