India, UAE to sign trade pact by Mar 2022; Round-1 of CEPA talks this week

India and the United Arab Emirates (UAE) have begun official discussions on a Comprehensive Economic Partnership Agreement (CEPA), which aims to boost bilateral trade and investment.

On Thursday 23rd September and Friday 24th September, the first round of CEPA discussions will take place. Both countries want to clinch an agreement within the next six months.

Within five years of the accord's signing, a new strategic economic agreement between the two countries is projected to grow bilateral trade in goods to US$ 100 billion and expand trade in services to US$ 15 billion.

“Both sides will aim to complete negotiations by December 2021 and sign a formal agreement in March 2022 after internal legal procedures and ratification,” commerce and industry minister Mr. Piyush Goyal said after meeting with UAE's minister of state for foreign trade Mr. Thani bin Ahmed Al Zeyoudi in the national capital.

If both countries can agree on a trade pact, it will be the first of a series of trade deals that India hopes to sign with other wealthy countries in the coming months. With bilateral trade, the UAE is India's third-largest commercial partner and second-largest export destination after the United States.

In 2019, India was the UAE's second-largest trading partner.

The UAE is also India's eighth-largest investor, having invested US$ 11 billion between April 2000 and March 2021, while Indian firms have invested over US$ 85 billion in the UAE.

Both countries decided, according to Mr. Goyal, to focus their conversations on issues that would have an immediate impact on trade. “We chose to focus on getting issues of urgent importance to be agreed upon in areas where we have a clear competitive and comparative advantage for trade between the two nations on both sides in products and services,” he added.

Textiles, jewellery, footwear, leather products, and handicrafts will be popular in India. Fintech, food, medical equipment, petrochemical equipment and byproducts would be among the UAE's key sectors, according to Mr. Thani.

Petroleum goods, precious metals, stones, gems and jewellery, minerals, food items such as cereals, sugar, fruits and vegetables, tea, meat, and seafood, textiles, engineering and equipment products, and chemicals are among India's top exports to the UAE. Petroleum and petroleum products, precious metals, stones, gems and jewellery, minerals, chemicals, and wood and wood products are among India's major imports from the UAE. In the 2019-2020 fiscal year, India bought US$ 10.9 billion in crude oil from the UAE.

Both ministers stressed that completing CEPA discussions in a timely and productive manner will deepen the two nations' strong trade and economic relations.

“Both Ministers reaffirmed their commitment to working together by agreeing to improve the World Trade Organization's rules-based, transparent, non-discriminatory, open, and inclusive multilateral trading system. They also committed to strive for a fair and inclusive resolution at the 12th World Trade Organization Ministerial Conference (MC12) in Geneva, Switzerland”. A statement from the official said.

According to the release, “both Ministers highlighted that CEPA will create new employment, enhance living standards, and give greater social and economic possibilities in both countries.”

Mr. Goyal said that he and Mr. Sheikh Hamed bin Zayed Al Nahyan, a member of the Abu Dhabi Executive Council, will co-chair the ninth UAE-India high-level joint task group on investments.

Mr. Thani stated that the UAE's policies have been designed to encourage enterprise and innovation, citing 100% foreign ownership laws, fast business setup procedures, and long-term visas for investors, important experts, and high-achieving students as examples. “It (CEPA) provides the groundwork for an ambitious new age. One in which we are able to attract investment and talent to the area, accelerate growth, and drive a broad-based economic recovery.” Mr. Thani added.

Source: Business Standard Private Ltd.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.