United Arab Emirates (UAE) and India have signed an FTA (Free Trade Agreement) that is all set to reduce tariffs for almost 80 per cent of goods and will give zero duty access to around 90 per cent of exports from India to UAE.
The Free Trade Agreement which will come into effect within the next 60 days is estimated to boost the annual bilateral trade between the two countries up to $100 billion from the $60 billion currently, within the five years of its adoption. The Comprehensive Economic Partnership Agreement between the two nations was signed by Piyush Goyal, the Commerce and Industry Ministry and the UAE’s Minister of Economy, Abdulla bin Touq Al-Marri almost after 88 days of ongoing negotiations.
As per Piyush Goyal’s statement, this comprehensive agreement with UAE will cover a wide array of gains for both economies and will increase the provision of opportunities in both economies. He said that the agreement will boost the nation’s exports in a variety of labour-oriented sectors such as gems and jewellery, leather, textiles, sports goods, footwear, pharmaceuticals, and engineering goods. The annual exports which are worth $26 billion from India that currently attract almost 5 per cent import duty in the United Arab Emirates will also benefit from the signed agreement.
This Comprehensive Trade Agreement between both countries will be inclusive of goods and services, Customs procedures, Rules of origin, intellectual property rights, government procurement, and e-commerce. Al-Marri said stated that he is confident about the UAE-India Comprehensive Economic Partnership Agreement will be regarded as a towering Agreement between the nations. He also mentioned that this agreement will commence a new era not only for the two economies but also for global trade adding that both countries had already removed tariffs on over 80% of products.
As per the official statements from the officials from the Commerce Ministry, it was stated that further tax concessions were expected from both sides over the next five years and it would lead to lower tariffs for almost 98 per cent of imports from the UAE. Exports from India are set to get zero duty access as well in the coming 5-10 years and it will include chemicals and petrochemical cement, electronic goods, machinery, and ceramics that currently accounts for about 9 per cent of the total value of current exports to the United Araba Emirates.
The Commerce Secretary, B V R Subrahmanyam while citing an example of tariff reduction said that we have given tariff concessions on gold to UAE and in return, they had eliminated tariffs on jewellery. Sources have revealed that India had agreed to give concessions on import duties on gold up to 200 tonnes per year and India imported around 70 tonnes of gold from UAE in the Financial Year 2021.