INDIA AND the United Arab Emirates (UAE) on Feb 18 signed a Free Trade Agreement (FTA), which is set to reduce tariffs for 80 per cent of goods and give zero duty access to 90 per cent of India’s exports to the UAE, reported Indian Express.
The agreement, which is expected to come into effect in about 60 days, is expected to boost annual bilateral trade to $100 billion within 5 years of its adoption, up from about $60 billion currently. The Comprehensive Economic Partnership Agreement was signed by Commerce and Industry Minister Piyush Goyal and the UAE’s Minister of Economy Abdulla bin Touq Al Marri after 88 days of negotiations.
“This FTA covers a wide array of gains for both economies, provides opportunities for business in both economies, “ said Goyal. The Minister added the agreement would boost the country’s exports in a number of labour-oriented sectors including gems and jewellery, textiles, leather, footwear, sports goods, engineering goods, and pharmaceuticals. Annual exports worth about $26 billion from India that currently attract a 5-per cent import duty in the UAE are set to benefit.
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The agreement covers areas including goods, services, rules of origin, Customs procedures, government procurement, intellectual property rights, and e-commerce. “I’m confident that the UAE India Comprehensive Economic Partnership Agreement will be regarded as a towering achievement, a new era not only for our two nations but for global trade”, said Al Marri, adding both countries had removed tariffs on over 80 per cent of products.
An official from the Commerce Ministry said further tariff concessions were expected on both sides over 5 years that would lead to lower tariffs for 98 per cent of exports and 90 per cent of imports from the UAE. Indian exports set to get zero duty access within a further 5 to 10 years, including electronic goods, chemicals and petrochemicals cement, ceramics and machinery accounting for about 9 per cent of the value of current exports to the UAE.
Citing an example of tariff reduction, Commerce Secretary B V R Subrahmanyam said: “We’ve given tariff concessions to UAE on gold, and they have eliminated tariffs on jewellery.” Sources said India had agreed to concessional import duties on gold imports up to 200 tonnes per year. India imported about 70 tonnes of gold from the UAE in FY21.
Under the #IndiaUAECEPA agreement, the UAE has also, in a first, agreed to facilitate market access and regulatory approval within 90 days for Indian pharmaceutical products and medical products that have been approved in developed jurisdictions such as the US, the UK, the EU, Canada and Australia.
India has FTA with six countries bilaterally and 18 countries multilaterally — 11 member-countries of the Association of South-East Asian Nations (ASEAN) and seven of the South Asia Free Trade Agreement. Five more are under discussion; these include bilateral deals with Australia, the UK, the US and Canada and a multilateral arrangement with the European Union, which has 27 members. Negotiations with Russia-led Eurasian Economic Union (EAEU) that includes Armenia, Belarus, Kazakhstan, and Kyrgyzstan, besides Russia, are also expected to start soon.
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