Trade pact between India and UAE soon

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India is deepening its engagement with the UAE

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 Trade pact between India and UAE soon

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  • The story: India and the United Arab Emirates (UAE) have formally launched negotiations on a Comprehensive Economic Partnership Agreement (CEPA) that aims at expanding bilateral trade and investment. A new strategic economic pact may increase bilateral trade in goods to $100 bn, services t $15 bn in 5 years.
  • Goal: Both sides will aim to conclude negotiations by December 2021 and sign a formal agreement in March 2022 after the completion of internal legal procedures and ratification. India's industry minister Piyush Goyal and UAE's minister of state for foreign trade Thani bin Ahmed Al Zeyoudi are negotiating the same.
  • A series of deal: This deal will be the first of the bunch of trade agreements that India aims to ink with other developed nations over the next few months. The UAE is currently India’s third-largest trading partner with bilateral trade and the second-largest export destination after the US. India was UAE's second-largest trading partner in 2019.
  1. UAE is also the eighth-largest investor in India, having invested $11 billion between April 2000 and March 2021, while investment by Indian companies in the UAE is estimated to be over $85 billion.
  2. Both nations decided that discussions should focus on items that would have an early impact on trade.
  3. For India items of interest will be textiles, jewellery, footwear, leather products and handicrafts. For the UAE, focus areas are fintech, food, medical equipment, petrochemical equipment and byproducts.
  • Details: India's major exports to the UAE include petroleum products, precious metals, stones, gems and jewellery, minerals, food items such as cereals, sugar, fruits and vegetables, tea, meat, and seafood, textiles, engineering and machinery products, and chemicals. India's top imports from the UAE include petroleum and petroleum products, precious metals, stones, gems and jewellery, minerals, chemicals and wood and wood products. India imported USD 10.9 billion of crude oil from the UAE in 2019-2020.
  • Nature of deal: Both want to strengthen the rules-based, transparent, non-discriminatory, open, and inclusive multilateral trading system embodied by the World Trade Organization. They agreed to work towards a balanced and inclusive outcome at the 12th WTO Ministerial Conference (MC12) in Geneva, Switzerland.
  • Outcome: CEPA is expected to create new jobs, raise living standards, and provide wider social and economic opportunities in both nations. Minister Goyal will co-chair the ninth UAE-India high level joint task force on investments with Sheikh Hamed bin Zayed Al Nahyan, Member of the Abu Dhabi Executive Council. Thani also said UAE's regulations have been designed to welcome enterprise and innovation, including 100 per cent foreign ownership laws, efficient business set-up procedures, and long-term visas for investors, key professionals and high-achieving students. "It (CEPA) lays the foundations for an ambitious new era, one in which we are able to attract investment and talent to the region, accelerate growth and spur a broad-based economic recovery.
  • EXAM QUESTIONS: (1) Trace the bilateral relations between India and the UAE. What are the key facets? (2) What kind of trade relations does India have with members of the Gulf Cooperation Council (GCC)? Explain.
Read more on - Polity | Economy | Schemes | S&T | Environment

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PT's IAS Academy: Trade pact between India and UAE soon
Trade pact between India and UAE soon
India is deepening its engagement with the UAE
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