India, UAE sign comprehensive trade pact

News: Indian PM and Crown Prince of Abu Dhabi held a Virtual Summit. Both leaders expressed deep satisfaction at the continuous growth in bilateral relations in all sectors.

What are the major outcomes of the summit?

Issue of a Joint Vision Statement: The Statement establishes a roadmap for a future-oriented partnership between India and UAE and identifies focus areas and outcomes.  The shared objective is to promote new trade, investment and innovation dynamic in diverse sectors, including economy, energy, climate action, etc.

Signing and exchange of the India-UAE Comprehensive Economic Partnership Agreement (CEPA): The Agreement will provide significant benefits to Indian and UAE businesses, including enhanced market access and reduced tariffs.

It is expected that the CEPA will lead to an increase in bilateral trade from the current $60bn to $100bn in the next 5 years.

For the first time, UAE has agreed to automatic registration and market authorization for Indian medicines in case of their regulatory approval in developed countries such as the USA, EU, UK and Japan. The agreement also had a permanent safeguard mechanism which can be resorted to in a situation of sudden surge in imports along with strict rules of origin, which will prevent products from other countries through the CEPA route.

– Both India and UAE jointly committed to a) fight extremism and terrorism, b) enhancing maritime cooperation, c) promote e-payment solutions, d) set up an IIT in the UAE and a joint Hydrogen Task Force (with special focus on production of Green Hydrogen).

Benefits of CEPA: a) will enable Indian professionals to find enhanced opportunities in the UAE. Both sides will benefit from UAE’s location as a strategic gateway to the Middle East, Africa and Europe. b) All forms of capital – financial, technological and human – will flow in both directions with a new and more efficient framework. c) It would generate 10 lakh jobs across multiple labour-intensive sectors. d) The pact would open access to broader African and Asian markets for India.  Micro, small and medium-sized enterprises will also find it easier to go global. India and the UAE have attractive, competitive and complementary startup ecosystems.

Important facts:

– In 2017, both the countries decided to elevate their relationship into a Comprehensive Strategic Partnership.

– The UAE is also the only country to participate in India’s strategic petroleum reserves.

Source: This post is based on the following articles:

India, UAE sign comprehensive trade pact‘ published in The Hindu on 18th Feb 22

India-UAE Virtual Summit & ‘India and UAE sign the historic CEPA aimed at boosting goods trade to US$ 100 billion over next five years‘ published in PIB on 18th Feb 22

India, UAE ink comprehensive trade pact; vow to jointly fight terrorism’ published in the Indian Express on 19th Feb 22

Bilateral trade will be $100 billion in 5 years’ published in TOI on 18th Feb 22

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