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What is the news?
India-United Arab Emirates free trade agreement (FTA) is just over a month to go to come into force. India and the UAE in February signed the Comprehensive Economic Partnership Agreement (CEPA).
About the India-United Arab Emirates CEPA
Aim: a) To facilitate higher investment flows for both countries, b) To ensure mutually beneficial and guarantee a maximum advantage in trade for both countries.
Key provisions of the deal:
-The deal will initially give zero-duty access to 90% of Indian products, and 65% of products from the UAE.
-Over the next 10 years, 97% of Indian products will get zero-duty access to the UAE market and 90% of products from the UAE will have duty-free access to the Indian market,
-Service exports are a major component of the deal. There are 11 sectors and more than 100 sub-sectors covered in total. These include business services, telecommunication, construction and related activities, education, healthcare, environment, finance and insurance, and tourism, travel and transport services.
-The CEPA enables companies in both countries to access government procurement.
– In terms of the movement of people who are seeking to provide services under the CEPA, this deal will offer a smoother process from both sides.
What is the significance of this deal for the UAE?
Ever since the pandemic, all sectors critical to the UAE such as supply chains, logistics, aviation, travel and tourism has been hit.
Through CEPA, the UAE businesses will now have improved access to the world’s fifth-largest economy, favourable tariffs in key export sectors including aluminium, copper, steel, and polymers, and greater market access for India’s services sector. According to Indian models, this deal will add $9 billion to UAE’s gross domestic product (GDP) by 2030.
What are the other key highlights of the deal?
-The deal was negotiated in a record 88 days. Further, This is the first FTA finalized by the Indian government since 2014.
-The trade deal kept the door open for India to conclude a larger pact with the six-member Gulf Cooperation Council (GCC).
|Read more: Significance of the India-UAE CEPA|
Source: This post is based on the article “The UAE welcomes a wider India-GCC trade agreement’” published in Livemint on 26th March 2022.