India and UAE sign CEPA; deal to cover almost 90% bilateral trade

India and the United Arab Emirates (UAE) on Friday signed a Comprehensive Economic Partnership Agreement (CEPA) that is set to benefit almost 90 per cent of trade -- both exports and imports-- between the two countries.

The trade deal has also provided a permanent safeguard mechanism, which will safeguard exporters and businesses from both countries from any unwarranted surge in volumes of any particular product, Commerce and Industry Minister Piyush Goyal said.

Several sectors, such as gems and jewellery, leather, plastic products, agriculture products, medical devices, pharmaceutical products, and automobiles will benefit from the agreement. India has given duty concessions on gold exported from the UAE, while Indian exporters will attract zero per cent duty on jewellery.

But some products have been kept on the exclusion list for both countries. In some cases, duty on products will be reduced in a phased manner as the domestic industry said it needed time.

The trade pact will provide significant benefits to Indian and UAE businesses, including enhanced market access and reduced tariffs, an official statement said. It is expected that the CEPA will lead to an increase in bilateral trade from the current $60 billion to $100 billion in the next five years.  

“The agreement will open up a lot of opportunities for our MSMEs and provide job opportunities to the tune of 1 million for our youth. It is a win-win for both economies and our people,” Goyal said.

He further said on the pharma side, the UAE for the first time has agreed that medicine or medical products approved by developed countries will get market access and regulatory approval in a time-bound manner of 90 days for being marketed in the UAE.

The India-UAE CEPA will be the first of the bunch of trade agreements that India aims to ink with other developed nations over the next few months. The UAE is currently India’s third-largest trading partner and the second-largest export destination, after the US.

India's major exports to the UAE include petroleum products, precious metals, stones, gems and jewellery, minerals, food items -- such as cereals, sugar, fruits and vegetables, tea, meat, and seafood -- textiles, engineering and machinery products, and chemicals.

India's top imports from the West Asian country are petroleum and petroleum products, precious metals, stones, gems and jewellery, minerals, chemicals, and wood and wood products. Prime Minister Narendra Modi and Crown Prince of Abu Dhabi HH Sheikh Mohammed bin Zayed Al Nahyan also held a Virtual Summit towards the continuous growth in bilateral relations in all sectors.

The major highlight of the Virtual Summit was the signing and exchange of the India-UAE CEPA by Goyal and UAE Minister of economy Abdulla bin Touq Al Marr, an official statement said.

The two leaders also released a Joint Commemorative Stamp on the occasion of the 75th anniversary of India's independence and the 50th year of UAE's foundation. Two MOUs signed between Indian and UAE entities were also announced during the summit.