New Delhi, (UNI): India and the United Arab Emirates (UAE) on Friday signed Comprehensive Economic Partnership Agreement (CEPA), the second such free trade pact in last five years, seeking to double the merchandise trade to $100 billion in next five years.
The pact was signed and exchanged by Minister of Commerce and Industry Piyush Goyal and Minister of Economy of UAE, Abdulla bin Touq Al Marri in the virtual presence of Prime Minister Narendra Modi and Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed Al Nahyan. “The Agreement will provide significant benefits to Indian and UAE businesses, including enhanced market access and reduced tariffs.
It is expected that the CEPA will lead to increase in bilateral trade from the current $ 60 billion to $ 100 billion in the next 5 years,” a statement from Prime Minister’s Office (PMO) said. Negotiations for CEPA with the UAE were launched in September 2021.
“Both nations are entering a golden era of economic and trade cooperation with the signing of India-UAE CEPA,” Goyal wrote on Twitter as the two sides signed the trade pact. India had signed Comprehensive Economic Cooperation and Partnership Agreement (CECPA) with Mauritius in February last year. Other than Mauritius and the UAE, India is currently in negotiation with seven more countries and blocks including Australia, UK, EU and Canada for a free trade agreement.
“It’s a huge milestone particularly because this is first major comprehensive economic partnership agreement which has been signed by India in last 10 years or so,” said Ajay Sahai, DG & CEO of Federation of Indian Export Organisations (FIEO). Sahai said India is already a dominant player in the UAE and has the required wherewithal to increase its share. Besides, Indian exporters are also looking at UAE as gateway to the Gulf Cooperation Council (GCC) countries and beyond (Africa).
The UAE is currently India’s third-largest trading partner with bilateral trade in 2019/2020 valued at $ 59 billion. It is also India’s second-largest export destination after the US, with exports valued at about $ 29 billion in 2019-2020.
The UAE is the eighth-largest investor in India, having invested $ 11 billion between April 2000 and March 2021, while investment by Indian companies in the UAE is estimated to be over $ 85 billion, as per official data.
India’s major exports to the UAE include petroleum products, precious metals, stones, gems & jewellery, minerals, processed foods, apparels, sugar, engineering and chemicals. India’s top imports from the UAE include petroleum and petroleum products, precious metals, stones, gems & jewellery, minerals, chemicals and wood and wood products.