India-UAE trade pact may benefit $26 billion worth of domestic goods subjected to 5% duty

On Friday, India and the United Arab Emirates signed a free trade agreement (FTA) to boost trade and economic ties between the two nations.

They signed a free trade agreement (FTA) on Friday, which will help their trade and economic ties.

Trade and Industry Minister Piyush Goyal and the UAE’s Minister of Economy Abdulla bin Touq Al-Marri signed and exchanged a deal called the Comprehensive Economic Partnership Agreement (CEPA).

When Indian Prime Minister Narendra Modi met with Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed Al Nahyan on the internet, they agreed and signed a trade deal. 

After signing the agreement, Goyal said this is an all-encompassing and balanced trade deal. 

“It gives both sides a lot of chances to make money. The agreement will help us double our trade with each other, Goyal said. 

An official statement said that the agreement would significantly impact Indian and UAE businesses, including better market access and lower tariffs. As a result of the CEPA, it is expected that the amount of trade between the countries will go up from what it is now, which is about $60 billion, to about $100 billion in five years. 

The agreement covers things like goods and services, rules of origin, customs procedures, government procurement, intellectual property rights, and e-commerce, among other things. 

Under these agreements, two trading partners cut or eliminate customs fees on the maximum number of goods they trade with each other. Besides, they also make rules easier to change in services and make more money. 

There was a lot of trade done between India and the United Arab Emirates in 2020 and 21, and it was worth around $43.3 billion. When the two years from 2020 to 2021 came around, the country exported $167 million worth of goods and imported $267 million worth of goods. USD 59.11 billion was spent on two-way trade in 2019-20, the same as last year. 

In September of last year, India and the United Arab Emirates (UAE) formally began talks about a trade deal, which they hope to sign. 

As a gateway to Africa and other parts of the world, Dubai is an excellent place to start. 

A trade deal between India and the United Arab Emirates could help $26 billion worth of Indian goods that are charged 5% duty.

An official says that more than $26 billion worth of Indian gems and jewellery could benefit from a new free trade deal with the United Arab Emirates. It would help a lot of labour-intensive industries like textiles and leather, sports goods, plastics and furniture, plastics, wood products, engineering, pharmaceuticals and medical devices, cars, and other things that use a lot of people. 

Computer-related services, audio-visual, education, health, tourism, travel, nursing, engineering, and accounting are service industries that will benefit from the pact the most. This is what the official said: 

India and the United Arab Emirates signed the Comprehensive Economic Partnership Agreement (CEPA) on February 18. The agreement’s goal is to boost trade between the two countries to more than $100 billion in goods over the next five years and create tens of thousands of jobs in both countries. 

UAE is already India’s second-largest export market, with exports worth about $29 billion in 2019-20. The CEPA with UAE is expected to help about $26 billion worth of Indian products that the UAE charges a 5% import duty. 

According to estimates, plain gold and gold-studded jewellery exports will rise to USD 10 billion in 2023. Tariff concessions given to the UAE by India in products like gold will help cut the cost of imports. Over the next five years, the value of textile exports is expected to rise by $ 2 billion. 

Indian businesses can sell bed and bath linen to hospitals in the United Arab Emirates without paying duty. “Beach towels, salon and spa linen and other contract textiles can also be sold to hospitals,” a government official told the New York Times. 

According to the agreement, the UAE will eliminate duty on more than 97% of its tariff lines (or products), corresponding to 97% of Indian exports. 

“An important part of this deal is that a permanent safeguard mechanism has been agreed to and can be used if there is a sudden surge in imports. It’s first time that India has signed a contract that says that products from other countries can’t be circumvented by going through the FTA route “A person who works for the government added something. 

If that wasn’t enough, there’s a separate list of products that can’t be sold in the United States. Goods on that list would stay outside the scope of the pact. India’s Tariffs Rate Quotas (TRQs) for specific items of its export interest to the United Arab Emirates will only be looked at after ten years when they will be changed.

Conclusion

A free trade deal was made between India and the United Arab Emirates on Friday, and it was called the FTA. Everything from the rules of origin to government procurement to intellectual property rights to e-commerce is covered in the agreement. Because of the CEPA, it is expected that the amount of trade between the countries will go up from $60 billion now to about $100 billion in five years. It was signed by India and the United Arab Emirates (CEPA). As a goal, the deal wants to see trade between the two countries rise to more than $100 billion in goods over the next five years.

There will be about $29 billion worth of Indian exports to the UAE in 2019-20. Forecasts say that in 2023, exports of both plain gold and gold-studded jewellery will reach a total value of USD 10 billion. There will be no tax on more than 97% of the goods and services that the United Arab Emirates sells, according to the deal. People in India won’t look at the tariff rate quotas for specific items that are important to them for ten years. They’ll change then, but not right away.

edited and proofread by nikita sharma