India has an opportunity to re-establish its trade relations with others, one settlement at a time
India has an opportunity to re-establish its trade relations with others, one settlement at a time
Two years after giving its last-minute pat on a major multilateral trade agreement, India last week announced the signing of a Comprehensive Economic Partnership Agreement with the United Arab Emirates (UAE). The Free Trade Agreement is a tacit acknowledgment that India needs to strengthen its trade ties with existing partners by lowering tariff walls and gaining more favorable access to its exports to boost trade and economic output. With the COVID-19 pandemic offering sharp relief to the public health and economic vulnerabilities of an increasingly interconnected world, a clear desire to turn inward was evident over the past two years as nations tightened travel and entry restrictions to protect them. Had put. population. And ironically, while India sought to promote self-reliance or self-reliance, the pandemic dampened domestic consumption demand, leading to a decline in overall economic output. On the other hand, there has been a strong jump in exports, with growth surpassing pre-pandemic levels. It is against this backdrop that the government’s renewed effort to negotiate its bilateral free trade agreements is a welcome change in the nail and signals that India trade ties with individual partner countries on equal terms rather than sticking to multilateral agreements. eager to strengthen. Necessarily address its major concerns.
The agreement, which was finalized less than six months after talks began in September, is a testament to the strength of bilateral ties and the recognition that there is much to be gained from deepening ties. The United Arab Emirates is already India’s third largest trading partner, with bilateral trade at $59 billion in 2019-20. While India’s exports stood at around $29 billion in the pre-pandemic fiscal year ended March 2020, the UAE supplied crude oil worth $10.9 billion to India in that period and considered New Delhi as its second largest trading partner. Both partners now aim to take advantage of the free trade deal to take bilateral trade trade to $100 billion over the next five years. While the tariff concessions from both sides are yet to be elaborated, India has made it clear that a range of exports, including textiles and jewelery will be allowed under the zero-duty regime once the agreement is formally implemented by May. profit has been determined. , Two-way investment flows and remittances – a major source of foreign exchange earnings for India given the large Indian workforce in the UAE – are also expected to get a boost. With several other FTAs in the pipeline, India has a new opportunity to re-establish its trade ties with the international community, one agreement at a time.
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