India and the UAE have formally forged a Comprehensive Economic Partnership Agreement that seeks to increase bilateral trade to $100 billion from $60 billion in five years through significant tariff cuts on goods and freer flow of services and investments. “Signed the path-breaking India-UAE CEPA along with the UAE Minister of Economy H.E. Abdulla bin Touq Al Marri. Sky is the limit for our trade and economic ties as we commit to building a shared future and enhancing he prosperity of our people,” Goyal tweeted after signing the CEPA on Friday. As both countries move towards increasing bilateral trade to $100 billion, it would create an estimated 1 lakh jobs and opportunities for the MSME sectors including food processing, Goyal said addressing a press conference. “Major sectors that are likely to gain from the CEPA include gems & jewellery, textiles, leather, footwear, plastic, furniture, agriculture products, engineering, pharmaceuticals and automobiles and most of the sectors are labour oriented,” Goyal pointed out. Prime Minister Narendra Modi and the Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed Al Nahyan issued a joint vision statement establishing a roadmap for a future-oriented partnership between the two countries and identifying focus areas and outcomes in a virtual summit on Friday. “The shared objective is to promote new trade, investment and innovation dynamic in diverse sectors, including economy, energy, climate action, emerging technologies, skills and education, food security, healthcare and defence and security,” per the statement. Goyal pointed out that the two countries had created a record by concluding a free trade pact in just 88 days.
Investment zone
The two countries also agreed to expedite work on a dedicated investment zone for UAE companies and work on forging of joint ventures with a focus on setting up a food corridor and establishment of a dedicated India Mart in Jebel Ali Free Zone.
Sectors including logistics & services, pharmaceuticals, medical devices, agriculture, agri-tech, steel and aluminium have been identified as areas for creation of investment opportunities for Indian investors in establishing specialised industrial advanced technology zones in Abu Dhabi. “This CEPA will be the foundation stone for next era of success,” said the UAE Minister, adding that cut in tariffs on 80 per cent of goods and coverage of a vast array of areas including logistics, services, government procurement, digital trade and movement of professionals would give a boost to both economies.
3rd largest trading partner
UAE was India’s third largest trading partner in 2020-21, after China and the US, with imports valued at $26.6 billion and exports at $16.7 billion. It is one of the top suppliers of oil to India and also exports precious metals, gems and jewellery, minerals, chemicals and wood products. The India-UAE CECA is also expected to speed up India’s proposed free trade agreement with the GCC countries that include Saudi Arabia, Bahrain, UAE, Qatar, Kuwait and Oman. This would be of great strategic interest to India which sources oil from the region.