Prime Minister Narendra Modi is likely to travel to Dubai next month where he may formalise the proposed India-UAE free trade agreement together with the top leadership of the country, an official source has said.
"There are talks on for the Indian PM's visit to Dubai in early January 2022 but the date has not been firmed up. There is a strong likelihood that the India-UAE Comprehensive Economy Partnership Agreement (CEPA) to be formally signed during the visit," the official said.
Modi is also likely to visit the on-going Dubai Expo 2020 and tour the Indian pavillion.
Both India and the UAE are trying to fast track negotiations on the proposed CEPA so that all loose ends can be tied before the visit.
“Lists for providing increased market access in goods and services have not yet been finalised. Attempts are on to finish domestic consultations with industry and other Ministries and Departments concerned at the earliest,” the official said.
An official team from the UAE will visit New Delhi on December 6-10 for the third round of India-UAE CEPA and there are expectations that the negotiations would be concluded at the end of the round, according to the Commerce & Industry Ministry.
It is more difficult for India to take final decisions on the CEPA as it has a large number of sectors to protect. The UAE, on the other hand, has zero duty or very low duties on a majority of items, and therefore, it is easier for it to be part of free trade agreements.
“UAE’s import duties on goods are insignificant except on a few items such as carbonated and sweetened drinks, alcohol, tobacco and a few more labour intensive products. India will need to gain increased market access in such products,” the source said. Market access in services, including mutual recognition agreements would also be crucial.
The Indian industry, however, is somewhat apprehensive of CEPA, as it is not sure how it would adjust to the increased competition.
Commerce and Industry Minister Piyush Goyal met the representatives of aluminium, copper, and chemicals and petrochemicals industry on Friday as part of the on-going multi-stakeholder consultations related to the India-UAE CEPA negotiations.
“The Indian industry has concerns on the India-CEPA and how vulnerable it might make their sectors if tariffs are reduced substantially,” the official said.
The Minister highlighted the potential benefits from the proposed CEPA agreement for industries which are labour intensive and also the beneficial ``spillovers’’ including increased investments, job creation, and employment opportunities, per an official release. Industry representatives were also apprised of the strategic importance of the agreement which encompasses deeper bilateral economic engagement and wider market access, the release added.
India-UAE trade
The UAE is the third largest trading partner of India despite a dip in both exports and imports in 2020-21 due to the pandemic. India’s exports to UAE last fiscal were valued at $16.7 billion while imports from the country were at $26.6 billion.
UAE is also one of the top 10 investors into India with an estimated $11 billion investments made by the UAE since 2000, more than half of which is in the form of FDI.
It is also home to around 3.5 million Indians and generates high remittances.