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India-UAE CEPA Agreement

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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.

About CEPA-

This is a bilateral agreement. This includes trade, investment, competition and intellectual property rights in goods and services.

Source – The Hindu

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