Pooling & Growing Together is the Aim of India & UAE Trade Agreement
India and the United Arab Emirates (UAE) on 18th February 2022 signed a Comprehensive Economic Partnership Agreement (CEPA). It is set to reduce tariffs for 80% of goods and give zero-duty access to 90% of India’s exports to the UAE. The agreement covers areas including goods, services, rule of origin, customs procedures, government procurement, intellectual property rights, and e-commerce.
The agreement came into effect on 1st May 2022. It is expected to boost annual bilateral trade to $100 billion within five years of its adoption, up from its current about $60 billion. 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. The two leaders also released a Joint Commemorative Stamp on the occasion of the 75th anniversary of India’s independence and the 50th year of the UAE’s foundation.
Several sectors, such as gems and jewellery, leather, plastic products, agriculture products, medical devices, pharmaceutical products, and automobiles will benefit from the agreement. India has given duty concessions on gold exported from the UAE, while Indian exporters will attract zero percent duty on jewellery. But some products are kept on the exclusion list for both countries. In some cases, duty on products will be reduced in a phased manner as the domestic industry said it needed time.
The UAE is India’s second-largest export destination after the US, with exports valued at $29 billion in 2019-2020. India was the UAE’s second-largest trading partner in 2019, with bilateral non-oil trade valued at $41 billion. The UAE is also the eighth-largest investor in India, having invested $11 billion between April 2000 and March 2021, while investment by Indian companies in the UAE is estimated to be over $85 billion.
Other than economic exchange there is also an exchange and movement of people across the two nations. India has the largest diaspora of population? in the world. As per the Ministry of External Affairs report, UAE ranks first in the non-resident Indians (NRIs) population in the world.
Today, UAE has a total population of 3.5 million Indians, which comprises 27 percent of the UAE’s total population of nearly 10 million, and is the largest among any ethnic group in the country.
Many Indians, especially entrepreneurs and tech professionals, are shifting base to Dubai. Around 35 percent of the Indian community in the UAE today comprises highly accomplished professionals.
This trade agreement marks the way for economic cooperation. But more than becoming trade partners, it seems that the aim is to be growth partners. This is possible by leveraging the knowledge of the Indian diaspora and not only limiting themselves to remittances.
Similarly, India should take more steps for active engagement with Qatar by understanding the promising role the country is playing in world economic affairs, geopolitics, and also, for the presence of the Indian diaspora there.