India-UAE Comprehensive Economic Partnership Agreement (CEPA) completes one year: How the trade partnership has flourished

The historic India-UAE Comprehensive Economic Partnership Agreement (CEPA) which was signed on February 18, 2022 and came into force on May 1, 2022, has completed one successful year today (May 1, 2023).

According to Zee Business report, this was the Fastest Executed Bilateral Agreement where imports and exports increased between India and United Arab Emirates (UAE). The agreement also boosted trade which benefited the domestic market. Labour-intensive sectors also boomed as a result of this tie-up. 

India’s global export rose by 5.3 per cent and exports to UAE increased by 11.8 per cent. While the export of commodities like jewelry, car, and beauty products rose, in particular - aircrafts, spacecrafts and exports of parts increased by 4859 per cent as UAE is a transit hub between Asia and Europe and Americas.

Similarly, imports also increased from the UAE by 18.8 per cent. The nation’s non-oil import from UAE increased by 4.1 per cent and global imports increased by 7.8 per cent.

The report further stated that CEPA ranked second in issuing Certificate of Origin– a document that confirms the 'nationality' of a product and serves as a declaration to satisfy customs or trade requirements– in the last 11 months. 

On the other hand, the export of commodities such as iron, steel, and apparel did not grow as expected.

What is India-UAE Comprehensive Economic Partnership Agreement (CEPA)?

A Comprehensive Economic Partnership Agreement (CEPA) was signed between India and UAE a year ago to strengthen the trade ties between the two nations. 

The agreement aimed to increase the total value of bilateral trade in goods to over US$100 billion and trade in services to over US$ 15 billion within five years.

Keeping in mind that the gems and jewellery sector contributes a substantial portion of India’s exports to the UAE the agreement is expected to benefit significantly this sector by providing tariff concessions. 

Overall, India is expected to benefit from preferential market access provided by the UAE on over 97 per cent of its tariff lines which account for 99 per cent of Indian exports to the UAE in value terms, particularly from labor-intensive sectors such as gems and jewelry, textiles, leather, footwear, sports goods, plastics, furniture, agricultural and wood products, engineering products, pharmaceuticals, medical devices, and automobiles. With regards to trade in services, Indian service providers have enhanced access to around 111 sub-sectors from the 11 broad service sectors.

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