new Delhi India and the United Arab Emirates on Friday signed a comprehensive trade and economic agreement that is expected to increase bilateral trade from $60 billion to $100 billion over the next five years.
The agreement was signed by Minister of Commerce and Industry Piyush Goyal and UAE Minister of Economy Abdullah bin Touq Al Mari in the virtual presence of Prime Minister Narendra Modi and Crown Prince of Abu Dhabi, Sheikh Mohamed bin Zayed Al Nahyan.
Addressing a press conference, Goyal said Indian gems, textiles, leather and sporting goods would benefit from the deal. Under the agreement, India agreed to grant tariff concessions on gold imports, while the United Arab Emirates abolished duties on jewelery imports into that country.
Furthermore, in a major boost for pharma companies, the UAE has agreed to allow market access for drugs from Indian companies within 90 days of approval in the US and UK.
“The most important thing in the CEPA (Comprehensive Economic Partnership Agreement) is the reduction in tariffs of up to 80% of the goods traded between the two countries. You are going to see a decrease in a few years,” said the UAE’s economy minister.
Goyal said about 80% of goods and services were covered in the deal. The remaining 20% consists of goods that are “sensitive” to domestic businesses and will require more time to reach a state when tariffs can be reduced.
A joint vision statement issued by Modi and the Crown Prince said the shared objective was to promote new trade, investment and innovation in diverse sectors including the economy, energy, climate action, emerging technologies, food security, defense and security. A road map for the future partnership between the two countries was agreed in the joint statement.
Goyal said: “It is time to reset our relationship and take it to a bigger level than before”.
He further said that CEPA is not an interim agreement, rather it is a comprehensive agreement finalized in the “shortest possible” time of just 88 days.
Along with trade measures, the deal provides a safeguard mechanism for businesses in both countries against unnecessary surge in the flow of products.
The deal is expected to be implemented within the next 60 days, by the first week of May.
It also focuses on expediting work on a dedicated investment area for UAE companies and joint ventures, setting up a food corridor and a dedicated India Mart in the Jebel Ali Free Zone.
The MoU will create investment opportunities for Indian investors in setting up a specialized Industrial Advanced Technology Zone in Abu Dhabi with a focus on logistics and services, pharmaceuticals, agriculture, steel and aluminium.
India’s exports to the UAE grew 77% year-on-year to $20 billion in April-December 2021, accounting for 6.6% of India’s total outbound shipments.
Dilsha Seth contributed to this story.
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