New Delhi: Commerce minister Piyush Goyal has said that the comprehensive free trade agreement signed between India and the UAE would help two-way commerce reach the $100 billion mark in the next five years, and will also facilitate millions of jobs in both countries.
The comprehensive free trade agreement signed between India and the UAE would help the two-way commerce reach the USD 100 billion mark in over five years and create lakhs of jobs in both countries, Commerce and Industry Minister Piyush Goyal said on Friday.
The agreement called the Comprehensive Economic Partnership Agreement (CEPA) is likely to come into force in May and will open doors to about 90 per cent of products of interest to India for export to the UAE right from the first day, the minister told reporters after the signing of the pact on Friday.
Mr Goyal and the UAE minister of economy Abdulla bin Touq Al-Marri signed the pact during a virtual summit held by Prime Minister Narendra Modi and Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed Al Nahyan. The two countries also unveiled a roadmap for the expansion of overall ties.
The agreement will provide significant benefits to Indian and UAE businesses, including enhanced market access and reduced tariffs. It is expected that the CEPA will lead to an increase in bilateral trade from the current USD 60 billion to USD 100 billion in the next five years In September last year, India and the UAE formally launched negotiations for the trade agreement. The negotiations for the 881-page agreement were concluded in record 88 days in December.
Mr Goyal described the trade pact as comprehensive and “balanced”.
The CEPA would generate 10 lakh jobs in labour-oriented sectors like textiles, handloom, gems and jewellery, leather and footwear and will give a huge boost to exports to the UAE market.
On the pharma sector, Goyal said, the UAE has agreed that made in India medical products, approved by the EU, the UK, Canada or Australia, will get market access and regulatory approval within 90 days of submission of applications. While the UAE has agreed to eliminate duties on Indian jewellery, India would give duty concessions on gold imports up to 200 tonnes. About gains for the Indian services sector, he said the agreement has significant access on the services side in a plethora of areas.
“This is one agreement that has many firsts in terms of the speed with which it did, in terms of the range of goods and services that it covers and in terms of opportunities that it provides,” he added. “Estimates are that this pact would double bilateral trade in goods and expand our trade in services. Also, provide over a million job opportunities for our young boys and girls here,” the minister said.
Food security in the UAE will be taken care of through assured supply from India through MoU that has been executed in APEDA and DP World as the logistics supplies and Al Dara, which are their equivalent to our FSSAI. India will also get the advantage of getting raw materials from the UAE at lower prices which will support domestic industry.
“Petroleum products will come in a big way from the UAE. We also expect a number of intermediates to come into India which will support our downstream processing. For example, our plastic industry will get a huge leg up in terms of capability to manufacture, at competitive prices. We hope that will help create millions of jobs in plastic,” Goyal said. Talking about advantages for UAE investors, he said both sides are looking to have a mechanism in India to fast track their investments in infrastructure, and in the logistics chain.
Under such agreements, two trading partners reduce or eliminate customs duties on the maximum number of goods traded between them. Besides, they also liberalise norms to enhance trade in services and boost investments. Bilateral trade between India and the UAE stood at USD 43.3 billion in 2020-21. Exports were worth USD 16.7 billion and imports aggregated at USD 26.7 billion in 2020-21. The two-way commerce stood at USD 59.11 billion in 2019-20. The UAE is a gateway to Africa and other parts of the world.