The deal with UAE, India’s third-largest trading partner after China and the US, signals the government returning to signing free trade agreements (FTAs) as it seeks to push exports and movement of Indian professionals. Given the growing bilateral ties, the agreement also signalled the strategic intent and also tap a possible gateway for exports to other countries in the region.
While the last deal was signed with Mauritius a few months ago, a major trade agreement has not been signed for close to a decade. Next up are free trade treaties with Australia and the UK, with negotiations underway with the European Union, Israel and Canada.
“It provides a wide array of gains for both economies and provides opportunities for businesses in both economies… This is an agreement which brings the economic dimension to a deep and enduring strategic partnership between UAE and India,” commerce & industry minister Piyush Goyal told reporters as he pitched it as a win-win deal.
The government expects the CEPA to push bilateral trade from $60 billion to $100 billion in five years apart from expediting work on a dedicated investment zone for UAE companies and joint ventures with a focus on setting up a food corridor and establishment of a dedicated India Mart in Jebel Ali Free Zone.
Besides, it is expected to create investment opportunities for Indian investors in establishing specialised industrial advanced technology zones in Abu Dhabi, with specific focus in areas of logistics and services, pharmaceuticals, medical devices, agriculture, agri-tech, steel and aluminium.
Goyal said that petrochemicals and dates will see easier access in India. Some crucial inputs for plastics and gems and jewellery are expected to come at cheaper rates, some of which will be re-exported. Commerce secretary BVR Subrahmanyam pointed out that India has offered tariff concessions on gold and the UAE has eliminated tariffs on jewellery.
UAE minister for economy Abdulla bin Touq Al Marri said the deal will result in investments in hospitality, logistics and healthcare.
Energy is seen as the other major element of the agreement with focus on meeting India’s requirements, including new energy sources.
The agreement is expected to come into effect around May as UAE needs domestic approvals.