The Comprehensive Trade and Investment Agreement will cut all tariffs on each other’s goods and aims to increase annual trade between the two countries to $100 billion within five years.
see photosUnion Minister Piyush Goyal with UAE Minister of Economy Abdullah bin Touq Al Marri
India and the United Arab Emirates on Friday signed a comprehensive trade and investment agreement that will eventually cut all tariffs on each other’s goods and aim to increase annual trade between the two countries to $100 billion within five years. Is.
The virtual signing ceremony marks the first trade deal sealed by the Gulf state since it began pursuing such agreements last September to bolster its position as a trade hub.
India’s Commerce Minister Piyush Goyal told reporters that the deal could create over one million jobs for India in the next few years, especially in labor intensive sectors such as the auto industry, plastics, leather and engineering.
Earlier, India’s Prime Minister Narendra Modi and the de facto ruler of the UAE Sheikh Mohamed bin Zayed Al Nahyan during a virtual summit between the leaders, senior officials of the two countries, already signed by major trading partners.
“The agreement … not only deepens our economic and trade ties with a close partner but opens up a new phase of global cooperation for us,” Sheikh Mohamed said in a joint statement.
India’s Prime Minister’s Office said the Comprehensive Economic Partnership Agreement (CEPA), as it is known, is expected to boost annual bilateral non-oil trade by $60 billion to $100 billion within the next three to five years.
“There will be a huge influx of trade and investment between the two countries and this is going to open the door for more business opportunities,” Thani Al Zayodi, Minister of State for Foreign Trade, told Reuters.
The CEPA is expected to be implemented by May after the approval of the UAE cabinet, Goyal said.
The agreement, which was not immediately made public, eliminates 80% of tariffs on goods from the United Arab Emirates and India, while all tariffs are to be removed within ten years, Al Zayoudi said.
He said UAE goods such as aluminium, copper and petrochemicals would benefit from the removal of tariffs.
The deal also includes the UAE’s commitment to services, investment, intellectual property and creating 140,000 highly skilled jobs by 2030.
India is the second largest trading partner of the United Arab Emirates, with billions of dollars in remittances sent home every year by more than three million Indians working in the Gulf state.
The UAE’s Ministry of Economy said that by 2030 CEPA would add $9 billion, or 1.7%, to the UAE’s GDP, exports would increase by $7.6 billion, or 1.5%, and imports would increase by $14.8 billion, or 3.8%.
The UAE is pursuing similar trade and investment deals with countries including Turkey and South Korea, and is expected to finalize bilateral talks with Israel and Indonesia soon.
It has announced regulatory and social reforms in recent years to ease business and life in the country, where most of the 10 million population is foreigners.
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“We are moving from a regional to a global hub,” Al Zayoudi said, referring to trade deals and policy announcements.
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