INDIA AND the United Arab Emirates (UAE) on Friday signed a Free Trade Agreement (FTA), which is set to reduce tariffs for 80 per cent of goods and give zero duty access to 90 per cent of India’s exports to the UAE.
The agreement, which is expected to come into effect in about 60 days, is expected to boost annual bilateral trade to $100 billion within 5 years of its adoption, up from about $60 billion currently. The Comprehensive Economic Partnership Agreement was signed by Commerce and Industry Minister Piyush Goyal and the UAE’s Minister of Economy Abdulla bin Touq Al Marri after 88 days of negotiations.
“This comprehensive economic partnership agreement covers a wide array of gains for both economies, provides opportunities for business in both economies, “ said Goyal. The Minister added the agreement would boost the country’s exports in a number of labour-oriented sectors including gems and jewellery, textiles, leather, footwear, sports goods, engineering goods, and pharmaceuticals. Annual exports worth about $26 billion from India that currently attract a 5-per cent import duty in the UAE are set to benefit.
Held a bilateral meeting with the UAE delegation led by Minister of Economy, H.E Abdulla bin Touq Al Marri & Minister of State for Foreign Trade, H.E @ThaniAlZeyoudi.
Both nations are entering a golden era of economic & trade cooperation with the signing of India-UAE CEPA. 🇮🇳🇦🇪 pic.twitter.com/cw7wccQjyd
The agreement covers areas including goods, services, rules of origin, Customs procedures, government procurement, intellectual property rights, and e-commerce. “I’m confident that the UAE India Comprehensive Economic Partnership Agreement will be regarded as a towering achievement, a new era not only for our two nations but for global trade”, said Al Marri, adding both countries had removed tariffs on over 80 per cent of products.
An official from the Commerce Ministry said further tariff concessions were expected on both sides over 5 years that would lead to lower tariffs for 98 per cent of exports and 90 per cent of imports from the UAE. Indian exports set to get zero duty access within a further 5 to 10 years, including electronic goods, chemicals and petrochemicals cement, ceramics and machinery accounting for about 9 per cent of the value of current exports to the UAE.
My remarks at the India-UAE virtual summit. https://t.co/uk6UlyElL4
Citing an example of tariff reduction, Commerce Secretary B V R Subrahmanyam said: “We’ve given tariff concessions to UAE on gold, and they have eliminated tariffs on jewellery.” Sources said India had agreed to concessional import duties on gold imports up to 200 tonnes per year. India imported about 70 tonnes of gold from the UAE in FY21.
Goyal said the agreement included robust rules of origin to protect both economies from misuse of the agreement by third countries, including a requirement of “melt and pour” for steel exports to qualify as domestically produced products from either country. The agreement also provides a permanent safeguard mechanism to protect businesses in both countries to prevent “ any unnecessary or unwarranted surge in volumes of (imports) any particular product, according to Goyal.
Under the agreement, the UAE has also, in a first, agreed to facilitate market access and regulatory approval within 90 days for Indian pharmaceutical products and medical products that have been approved in developed jurisdictions such as the US, the UK, the EU, Canada and Australia.
Goyal noted that the deepening of the relationship with the UAE would also help Indian exporters gain access to other West Asian countries, Africa and some parts of Europe.