New Delhi: India and the United Arab Emirates (UAE) inked a Comprehensive Economic Partnership Agreement (CEPA) on Friday to boost trade ties even as both sides formed a roadmap for future expansion of cooperation, following a virtual summit between Prime Minister Narendra Modi and Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed Al Nahyan. The trade pact was signed by Commerce Minister Piyush Goyal and Economy Minister of the UAE Abdulla bin Touq Al Marri.
At the virtual summit, Modi and Al Nahyan issued a joint vision statement titled "Advancing the India and UAE Comprehensive Strategic Partnership: New Frontiers, New Milestone". "The statement establishes a roadmap for a future-oriented partnership between India and the UAE and identifies focus areas and outcomes," an official statement said.
Also read: India-UAE summit to witness the signing of CEPA - a boost to economic and trade partnership
"The shared objective is to promote new trade, investment and innovation dynamic in diverse sectors, including economy, energy, climate action, emerging technologies, skills and education, food security, healthcare and defence and security," it said. The statement said both leaders expressed deep satisfaction at the continuous growth in bilateral relations in all sectors. It said the CEPA will provide significant benefits to businesses in both the countries, including enhanced market access and reduced tariffs.
Prime Minister Narendra Modi put out a tweet expressing his pleasure in participating in the Virtual Summit with the Crown Prince of Abu Dhabi. He expressed that the India-UAE comprehensive strategic partnership has undergone huge transformation in the past seven years. "HH Mohamed Bin Zayed and I believe that the India-UAE CEPA signed today will be a game-changer in our economic ties. With enhanced market access, bilateral trade in goods should rise to $100 billion and services to $15 billion in the next 5 years," the PM tweeted. 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.
Importance of India-UAE CEPA trade deal
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 5 years.
The CEPA trade pact will help to unlock new trade routes between Africa and Asia. Indian exporters will gain market access in the UAE but will also provide wider access to the much larger Arab and African markets. The CEPA deal is of utmost importance as it will provide substantial net gains for India, particularly in labour-intensive industries - Gems and Jewellery, Textiles, Leather, Footwear, Sports goods, Plastics, Furniture, Agricultural and wood products, Engineering products, Pharmaceuticals & medical devices, and Automobiles.
It is mutually beneficial and boosts bilateral trade (goods) to $100billion over five years and $15 billion (for services), almost double of pre-pandemic levels. The CEPA covers Trade in Goods, Rules of Origin, Trade in Services, Technical Barriers to Trade, Dispute Settlement, Telecom, Customs Procedures, Pharmaceutical, IPR, Digital Trade and Cooperation in other areas. For the first time in a trade agreement, a separate Annex on Pharmaceuticals has been incorporated to facilitate access to Indian pharmaceutical products. India’s 1st comprehensive trade agreement in a decade comes at a time when India is celebrating 75 years of Independence & UAE is celebrating the 50th anniversary of its foundation.
India- UAE CEPA is likely to benefit about $26 billion worth of Indian products that are currently subjected to 5 per cent import duty by the UAE. CEPA will provide a platform for SMEs in both countries to expand internationally by granting them access to new customers, networks, and avenues of collaboration.
MoUs signed between India-UAE
Two MOUs signed between Indian and UAE entities were also announced during the Summit. They included an MOU between APEDA and DP World & Al Dahra on Food Security Corridor Initiative and MOU between India's Gift City and Abu Dhabi Global Market on cooperation in financial projects and services. Two other MOUs - one on cooperation in Climate Action and the other on Education have also been agreed between the two sides. PM Modi thanked His Highness Crown Prince of Abu Dhabi for taking care of the Indian community during the Covid-19 pandemic. He also invited him to pay a visit to India.
