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India and UAE Sign First Free Trade Agreement | 100 Billion in 5 year

Mar 02, 2022
India and UAE Sign First Free Trade Agreement

India and UAE Sign First Free Trade Agreement

Recently UAE became India's 3rd-largest trade partner and The 880-page deal was negotiated in just 88 days.

Additionally, the deal includes a permanent safety mechanism to protect businesses in both countries from sudden surges in trade volumes.

New Delhi's Commerce and Industry Minister Piyush Goyal and UAE's Economy Minister Abdulla bin Touq Al-Marri signed the deal in New Delhi. The deal cuts import duties on a wide range of products, but the government expects it to boost gem, jewelry and apparels exports especially to the UAE and expand total trade up to $100 billion in the following 5-years.

By 2020-21, bilateral trade between the two countries would amount to $43.3 billion and would encompass thousands of trade items. In 2019-20, pre-pandemic, the trade between the two countries would total $59 billion. The UAE also houses 35 lakh people of Indian descent.

During that time, a series of business interactions will be held between companies from both sides across India as part of the CEPA process, Goyal said. The CEPA is expected to come into effect by the first week of May.

Goyal said that an 880-page document covers topics such as free trade, digital economy, government procurement, strategic areas, he added that almost 90 percent of all traded items are set to benefit from the deal,

 

 

This deal will benefit India's exports of gems & jewelry, textiles, leather, footwear, sports goods, plastics, furniture, Agri goods, pharma, medical devices, automobiles, and engineering products. In which most of these sectors are labor-oriented and this predicted that we can grow our bilateral trade to $100 billion, open up at least 10 lakh jobs for youth

"The UAE has graciously accepted our request that as soon as an Indian medical product is approved by the UK, US, EU, Canada, and Australia, and passes through their rigorous regulatory process, these products will receive market access and regulatory approval in the UAE."

He also said that both countries' businesses will be protected from any premature surges in the volume of any itams, through a permanent safeguard mechanism.

Then Touq Al Mari said, "Although it is currently negotiating trade deals with up to eight countries, this deal with India has great economic and strategic significance for the UAE. "The projections are clear. It will add 1.7 percent or $8.9 billion to our national GDP. Exports will rise by 1.5 percent".

Goyal said “ the UAE is expected to benefit from increased exports of metals, minerals, petrochemicals and petroleum products.” The Comprehensive Economic Partnership Agreement was signed at a virtual summit between Indian Prime Minister Narendra Modi and UAE President Sheikh Mohammed.

After being launched in September 2021, negotiations on the deal were finished in just 88 days. The deal is an 'early harvest' component of a much larger trade and economic partnership in the future.

This deal is one from which both parties sign off on a set of fairly easily attainable deliverables.

The British Secretary of State for International Trade Anne-Marie Trevelyan also visited India last month to initiate talks on a free trade agreement.

While Britain expects to double its exporting goods to India by 2035 by tapping into its large middle class, New Delhi wants greater opportunities for Indians to study and work there effectively.

The government has assumed a very interesting track for agreements with both country Britain and Australia.

They are trying to do an "early harvest agreement" for the sectors that are ready at this point to accept reciprocal market access because they are fully assured to face competition from imports,” said Dhar.

However, Goyal stressed that this deal shouldn't be termed an 'interim agreement', additionally, it is a fully legally scrubbed deal protecting the trade and strategic interests from both sides.

 


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