UAE, India sign 'milestone' pact to boost economies
India and the United Arab Emirates on Friday inked a Comprehensive Economic Partnership Agreement (CEPA) as Prime Minister Narendra Modi and the West Asian nation's de facto ruler Sheikh Mohammed bin Zayed Al Nahyan had a virtual summit.
Modi told Sheikh Mohamed that India would welcome investment by the UAE in all sectors, including logistics, healthcare and hospitality, particularly in Jammu and Kashmir. The two leaders also agreed on opening an Indian Institute of Technology (IIT) in the UAE.
The CEPA was signed by Minister of Commerce and Industry, Piyush Goyal, and his counterpart, Minister of Economy of the UAE, Abdulla bin Touq Al Marri, in the virtual presence of the leaders of the two nations. The two sides expect that the agreement will enhance bilateral trade in goods from $60 billion to $100 billion in five years. The pact is also likely to help expand bilateral trade in services to $15 billion, almost double of pre-Covid-19 level.
The officials in New Delhi said that the India-UAE CEPA will help unlock new trade routes between Africa and Asia. The exporters of India will gain wider access, not only to the UAE market, but also to the much larger Arab and African markets.
The UAE has offered immediate duty elimination on over 80 per cent of its tariff lines corresponding to 90 per cent of India’s exports to the West Asian nation in value terms.
“It is noteworthy that India and the UAE were able to conclude negotiations on such an important agreement in less than three months,” the Prime Minister said during the virtual summit with the Crown Prince of Abu Dhabi. The CEPA with the UAE was the first comprehensive trade agreement India inked with any country in a decade.
The government officials in New Delhi said that the deal with the UAE would result in substantial net gains for India, particularly in labour intensive industries – gems and jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agricultural and wood products, engineering products, pharmaceuticals and medical devices as well as automobiles.
The CEPA will ensure zero duty from day one after the agreement comes into force, accounting for 90 per cent of India’s exports to UAE in value terms. It will be followed by duty elimination within five to 10 years on additional 9 per cent of trade value for electronic goods, chemicals and petrochemicals, articles of stone, cement, ceramics and machinery.
Modi and Sheikh Mohamed also agreed to enhance bilateral maritime cooperation for “maintenance of peace and security in the region”. They reaffirmed joint commitment to fight against extremism and terrorism, including cross-border terrorism, in all forms, at both regional and international levels, according to a joint statement issued after the virtual summit.
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