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The pact was signed by Commerce Minister Piyush Goyal and the UAE’s Economy Minister Abdulla bin Touq Al Marri during a virtual summit between 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, an official statement said.
”It is expected the CEPA 9Comprehensive Economic Partnership Agreement) will lead to an increase in bilateral trade from the current USD 60 billion to USD 100 billion in the next five years,” it said.
Under the provision of the CEPA, Indian exporters will not only gain market access in the UAE but will also provide them wider access to the much larger Arab and African markets, according to officials.
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The officials said the pact will ensure substantial net gains for India, particularly in labour-intensive industries such as gems and jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agricultural, engineering products, medical devices, and automobiles.
They said 90 percent of the Indian exports, in terms of value, to the UAE will get market access at zero duty from day one of the entry into force of the agreement.
Zero duty will be applicable within five to 10 years on an additional nine percent of the trade value for products such as electronic goods, chemicals and petrochemicals, articles of stone, cement, ceramics, and machinery.
The UAE is also offering immediate duty elimination on over 80 percent of its tariff lines corresponding to 90 percent of India’s exports in value terms, according to the provisions.
The CEPA covers trade in goods, rules of origin, trade in services, technical barriers to trade, dispute settlement, telecom, customs procedures, pharmaceutical, digital trade, and cooperation in other areas.
The officials said that for the first time in a trade agreement, a separate annex on pharmaceuticals has been incorporated to facilitate access to Indian pharmaceutical products.
They said CEPA is likely to benefit about USD 26 billion worth of Indian products that are currently subjected to five percent import duty by the UAE.
In the services sector, the UAE has offered 111 sub-sectors to India as compared to 100 sub-sectors by India to the UAE. Substantial gains in India’s areas of interest include computer-related services, audiovisual services, educational services, health services, tourism, and travel-related services and professional services (nursing, engineering, accountancy, etc), according to the pact.
The officials said the UAE has committed to making significant investments in India’s infrastructure.
The CEPA will also provide a platform for SMEs in both countries to expand internationally by granting them access to new customers, networks, and avenues of collaboration, the officials said.