India has raised concerns over the implementation of the rules of origin under the India-UAE Comprehensive Economic Partnership Agreement (CEPA) for silver, as there was a spurt in its imports following the implementation of the trade pact. The matter is to be taken up at a joint task force meeting next week.
“We have a joint trade committee, which works on these issues. Specific issues are taken up. Next week they have meetings in the UAE for which our team is leaving very soon,” Commerce & Industry Minister Piyush Goyal said in response to a question on India’s concerns on rules guiding silver imports from the UAE.
The Minister addressed the 12th India-UAE high-level joint task force (HLTF) on investments with UAE’s Sheikh Hamed bin Zayed Al Nahyan, MD of Abu Dhabi Investment Authority (ADIA) on Monday
The co-chairs also acknowledged the rapid rise in bilateral trade under the Comprehensive Economic Partnership Agreement (CEPA), which came into force in May 2022, per a press statement.
“As a result of the deal, bilateral trade has risen consistently, with non-oil trade rising to $28.2 billion in the first half of 2024, a 9.8 per cent year-on-year increase. The agreement has also spurred FDI - as of 2023, the UAE is India’s fourth largest foreign investor with $3.35 billion committed across a wide range of sectors, representing a threefold increase on 2022,” the statement added.
Indian FDI into the UAE in 2023 totalled $2.05 billion, more than 2021 and 2022 combined.
ROO implementation
On the issue of implementation of ROO (Rules of origin) on silver, which determine the minimum value addition needed for exports at concessional duties, the Minister said that he had already discussed this issue with his counterpart and colleague Thani Al Zeyoud from UAE.
“The UAE has assured that there will be nothing that will hurt India’s trade and business interest,” he said.
Silver imports from UAE increased 5853 per cent rise to $1.74 billion in FY24 from only $29 million during FY23.
Subsequently, the government reduced import duties on gold and silver on MFN basis for all countries to 6 per cent from 15 per cent in this year’s budget, to check imports from UAE (as UAE enjoyed concessional duty of 8 per cent). However, since the duties are to be reduced to zero in 10 years under the CEPA, India feels the need for tightening of import rules under it.
India and the UAE are also working on interlinking two national payment platforms– UPI (India) and AANI (UAE) – to facilitate seamless cross border transactions between the two countries, the Minister said.