India and UAE CEPA: The Commerce Ministers of India and (United Arab Emirates) UAE have formally launched negotiations on the India-United Arab Emirates Comprehensive Economic Partnership Agreement (CEPA).
- The first round of CEPA negotiations will be held on 23-24 September 2021.
- Both Indian Union Minister Piyush Goyal and UAE Minister of State for Foreign Trade Dr. Thani bin Ahmed Al Zeyoudi, emphasized that CEPA will create new jobs, raise living standards, and provide wider social and economic opportunities in both nations.
- CEPA is expected to increase bilateral trade in goods to USD 100 billion within five years of the signed agreement and increase trade in services to USD 15 billion.
- It will also assist in post-Covid economic recovery and future economic growth of both nations.
India and UAE – Economic Relations:
- Currently, the UAE is India’s third-largest trading partner with bilateral trade in 2019-2020 valued at $59 billion.
- The UAE is also India’s second-largest export destination after the US, with exports valued at approximately USD 29 billion in 2019-2020.
- India was the UAE’s second-largest trading partner in 2019, with bilateral non-oil trade valued at $41 billion.
- The UAE is the eighth-largest investor in India, having invested USD 11 billion between April 2000 and March 2021, while investment by Indian companies in the UAE is estimated to be over USD 85 billion.
- India’s major exports to the UAE include petroleum products, minerals, precious metals, stones, gems and jewellery, food items such as cereals, sugar, fruits and vegetables, tea, meat, and seafood, textiles, engineering and machinery products, and chemicals while India’s top imports from the UAE include crude petroleum and petroleum products, jewellery, precious metals, stones, gems and, minerals, chemicals and wood and wood products.
- In 2019-2020, India imported $10.9 billion of crude oil from the UAE.
Significance of free trade agreement:
- Under a free trade agreement, two trading partners usually reduce or eliminate customs duties on the maximum number of goods traded.
- They also liberalize norms to enhance trade services and boost investments.