India-UAE CEPA Agreement
Recently the Comprehensive Economic Partnership Agreement (CEPA) has been signed between India and United Arab Emirates (UAE).
Indian products worth about $26 billion are likely to benefit from the implementation of CEPA. Currently the UAE imposes an import duty of 5% on these items.
The United Arab Emirates is the third largest trading partner of India. The two largest trading partners are the US and China.
Key Provisions of India-UAE CEPA
- About 90% of the products exported from India to UAE will attract zero duty. A permanent safeguard mechanism has been put in place to deal with a sudden increase in the import of a product.
- Indian generic drugs will automatically get registration and marketing rights in UAE after getting permission in developed countries.
- It also has a strict provision like “Rules of Origin: ROOs”. This necessitates adequate processing of value addition up to 40%.
- The ‘law of origin’ is used in the agreement to determine whether a product will be eligible for a duty-free or reduced duty regime under trade agreements.
Importance of CEPA-
- The agreement is expected to reach over $100 billion in bilateral commodity trade over the next five years. Similarly, trade in services is expected to reach over $15
- About 10 lakh new employment opportunities will be created in India.
- This agreement will pave the way for comprehensive trade agreements with Gulf Cooperation Council (GCC) countries like Oman, Qatar etc.
This is a bilateral agreement. This includes trade, investment, competition and intellectual property rights in goods and services.
Source – The Hindu