One can find the details of India UAE Comprehensive Economic Partnership Agreement – CEPA is in line with India’s trade relations with the UAE. The historical agreement is signed between the leaders of both countries in February 2022. The new pact aims to a five-year program that will boost trade relations between the countries to the tune of 100 billion US Dollars. The agreement was signed by senior ministers of both countries in the virtual presence of leaders of both countries. Indian prime minister was in New Delhi, where the signing happened and the UAE Vice president was in Abu Dhabi and both witnessed the signing process online.
Date of India UAE CEPA Signing
The Comprehensive Economic Partnership Agreement – CEPA between India and UAE was signed by India’s Commerce Minister Mr. Piyush Goyal. The UAE part was signed by a delegation of UAE’s Economy minister Abdullah Bin Touq Al Merri and Minister of State for Foreign Trade Dr. Thani Bin Ahmad Al Zeyoudi on 18th February 2022 at New Delhi. Even though the pact is signed in February, it is not taking effect immediately. The date of implementation of it will probably be in May 2022.
Figures of India UAE CEPA Agreement
Currently, the trade between India and UAE shows a figure of $60 billion. This makes UAE, the 3rd biggest export-import partner of India. Only the US with $67.4 billion and China with $ 65.1 billion are ahead of UAE.
India and UAE expect to increase the trade figure to $100 billion to $ 115 billion in the coming 5 years. As a result, there will be a resurgence in the job market as well. India will have extra job opportunities of 1 million-plus and UAE will have job opportunities above 140,000 as per estimation.
Gold ornaments imported from India will have a reduced customs duty rate due to the agreement. Currently, 5% customs duty is imposed on such jewelry in the UAE. In turn, Indian gold ornament manufacturers will get more access to the UAE gold market, and export to India will happen at a better rate agreement.
For India, the UAE is the ninth biggest Foreign Direct Investment country with $17 billion. This is from about 2000 UAE companies. With CEPA, more UAE-India startups will come up and as the investment increases, UAE’s rank for India will also rise.
Beneficiaries of India UAE CEPA Pact
Trade figures of Non-oil trade between UAE and India are mainly on Gold and Pharmaceutical products. These two sectors are going to benefit most out of it. Other than these, Textiles, Plastics, Leather, Agricultural, Medical and Automobile sectors are also going to benefit.
Currently, India is having gold trade transactions with Hong Kong and Italy in a larger way. A major part of these will be converted to UAE after the CEPA implementation. A reduction of duty on gold will boost the import of gold from the UAE in India. Indian gold ornament manufacturers will get an export benefit when UAE reduces the Custom Duty from the existing 5% to a lower rate.
The gold retail sector in UAE will also get a benefit from this. The CEPA will bring down the selling price of gold products in the UAE. Gold consumers such as UAE residents, Transit Travelers through UAE, and tourists will get the benefit of lower gold prices.
Details of India UAE CEPA Agreement
The maximum benefit will go to India’s pharmaceutical sector. Any pharma product that is approved by the FDA of the United States will get access to the UAE market. As a result of the CEPA, the process of approval is shortened to 90 days. Genetical Medicines made in India are having a lower price than those made in other countries. This gives a superior edge to Indian pharmaceutical manufacturers.
The medicine consumers also will benefit from the pact as the cost of medicines will come down by 5 times to 10 times as per medical experts in the UAE.
Another major sector that will benefit is the Indian Steel Industry. Value-added products exported to the UAE will have duty benefits as per the CEPA agreement. This will boost the exports from India and thus the large and SME segments of India at one side. The other side is in UAE – the steel consumers in the UAE will get competitively priced quality steel products from India.
The plastic industry in India will also benefit from the pact. The price of industrial and consumer plastic products in the UAE will also benefit from the duty factor of Indian products in the UAE. As per an estimation, about 4 million jobs in India will be created with UAE’s investment in India in this sector.