India and United Arab Emirates signed a historic pact called the Comprehensive Economic Partnership Agreement (CEPA), which is being considered the fastest free trade agreement between any two countries in a record time of three months.
The pact was signed by union minister of commerce and industry Piyush Goyal and a UAE delegation led by minister of economy Abdulla bin Touq Al Marri and minister of state for foreign trade Thani bin Ahmed Al Zeyoudi, during a bilateral meeting on Friday. The deal has focused on areas such as defence, energy and climate among others, and has a vision statement of boosting trade between the two countries to $100 billion in five years.
Here are the highlights of the trade pact that will decide the course of future bilateral relations between India and UAE:
1. The CEPA is India’s first comprehensive trade agreement in a decade. It is also the fastest FTA (free trade agreement) to be negotiated between any two countries.
2. The deal will help unlock new trade routes between Africa and Asia, with Indian exporters gaining market access to UAE along with wider reach to larger Arab and African markets.
3. India’s particularly labour-intensive industries will have substantial net gains through this trade pact: gems and jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agricultural and wood products, engineering products, pharmaceuticals and medical devices, automobiles.
4. The India-UAE CEPA is likely to benefit about $26 billion worth of Indian products, which are currently subject to 5 per cent import duty.
5. Close to 90 per cent of India’s exports to UAE in value terms will be duty free from the first day of the trade agreement being enforced.
6. Additional 9 per cent of trade value will also be duty free within five to 10 years for following products: electronic goods, chemicals and petrochemicals, articles of stone, cement, ceramics, machinery.
7. No duty on over 80 per cent of its tariff lines corresponding to 90 per cent of India’s exports in value terms.
8. The pact covers trade in goods, rules of origin, trade in services, technical barriers to trade, dispute settlement, telecommunications, customs procedures, pharmaceuticals, intellectual property rights, digital trade and cooperation in other areas.
9. For the first time in any trade agreement, there is a separate annexe on pharmaceuticals to facilitate access of Indian pharmaceutical products.
10. The deal comes at a time when India is observing 75 years of independence, while UAE is celebrating 50th anniversary of its foundation.
11. UAE has offered 111 sub-sectors as compared to 100 sub-sectors by India. Substantial gains in areas of interest include computer-related services, audio-visual services, education services, health services, tourism and travel-related services, professional services (nursing, engineering, accountancy, etc) among other business services.
12. India will also see a boost in infrastructure investment by UAE.
13. The CEPA will provide a platform for small and medium enterprises in both countries to expand internationally by granting access to new customers, networks and avenues of collaboration.
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