India-UAE trade deal New Delhi/IBNS: India on Friday signed a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates (UAE) that will cut down the import duties on the majority of Indian exports to the Middle Eastern country.
The trade pact is the biggest one signed by the Narendra Modi government since first coming to power in 2014.
The deal was signed in New Delhi by Commerce and Industry Minister Piyush Goyal and UAE's Minister of Economy Abdulla bin Touq Al Marri.
A large number of items produced in India are covered in the agreement, but the government expect that it will provide a fillip to the export of gems and jewellery, and apparels to the UAE and increase the total trade up to $100 billion over the next 5-years.
In 2020-21, the bilateral trade between India and UAE stood at $43.3 billion.
While United States and China hold the top two positions in terms of bilateral trade with India, UAE is in the second place. In 2019-20, the estimated bilateral trade between the two countries stood at $59 billion.
The CEPA is likely to come into force by the first week of May as the process will take nearly 60-days, Goyal said.
The 880-page trade agreement covers a variety of topics such as free trade, digital economy, government procurement, strategic areas, Goyal said.
Goel said the agreement will benefit almost 90 percent of all traded items.
Indian exports such as gems & jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agri goods, pharma, medical devices, automobiles, engineering goods will be benefitted by the deal while metals & minerals, petrochemicals, petroleum products and dates exported from UAE will get the benefit of the deal, Goel said.
"Most of these sectors are labour oriented and we do believe this will, as we grow our bilateral trade to $100 billion, open up at least 10 lakh jobs for youth," Goyal said.
Further, India has given tariff concession on gold export to UAE while they have eliminated jewellery export tariffs from India.
"In a first, the UAE has been gracious in accepting our request that once an Indian medical product is accepted by UK, US, EU, Canada, and Australia, and goes through the rigorous regulatory process of these countries, such products will get market access & regulatory approval in a time-bound manner of 90-days for being marketed in the UAE," Goyal said.
"The projections are clear. It will add to 1.7 percent or $8.9 billion to our national GDP. It will raise exports by 1.5 percent," Touq Al Mari said. Even as UAE is in talks with eight other countries on trade deals, the FTA with India holds strategic importance to the country.
The deal was mentioned by Prime Minister Narendra Modi in the India-UAE virtual summit.
"I am confident this will begin a new age of economic cooperation and growth for both our nations," Modi said.
The joint summit was organised by Prime Minister Narendra Modi and Deputy Supreme Commander of the United Arab Emirates (UAE) Armed Forces & Crown Prince of Abu Dhabi, Sheikh Mohamed bin Zayed al Nahyan, also held on Friday.
Negotiations on the deal have been completed in a record time of just 88 days.
Goyal underscored that the deal shouldn't be considered as an 'interim agreement' or arrangement as its is a fully legally scrubbed deal protecting the trade and strategic interests of both sides.
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