A free trade agreement between India and the United Arab Emirates (UAE) that was signed on February 18 came into force from May 1, with the completion of all constitutional and legal processes surrounding the pact.
Commerce Secretary BVR Subrahmanyam on Sunday flagged off the first consignment of goods comprising jewellery products to the UAE under the trade pact, termed as the Comprehensive Economic Partnership Agreement (CEPA), in New Delhi. The consignment, which will now attract zero Customs duty under the trade agreement, is expected to reach Dubai on May 1.
Gems and jewellery sector contributes a substantial portion of India’s exports to the UAE and is expected to benefit significantly from the tariff concessions under the pact.
The India-UAE CEPA will benefit almost 90 per cent of India’s exports in terms of value.
The UAE is offering overall duty elimination on more than 97 per cent of its tariff lines corresponding to 99 per cent India’s exports in terms of value. Indian exporters will now get immediate zero duty market access in labour-intensive sectors, such as leather, footwear, gems, and jewellery, furniture.
The deal is expected to increase the total value of bilateral trade in goods to more than $100 billion and in services to over $15 billion within five years.
“$100 billion is just a starter...as we go along, it will become $200 billion and $500 billion in the years to come,” Subramanyam said, adding that the agreement is a trendsetter because of the short time span of 88 days in which the deal was finalised.
The government will simplify the way agreements have been made so that exporters are able to understand the provisions and make the best possible use of them, he said.