India – United Arab Emirates Comprehensive Economic Partnership Agreement (CEPA)
It is noteworthy that formal talks in this regard started in September 2021. It aims to sign an agreement by March 2022.
Both the countries have listed products in the areas for which they want mutual exemption in the recently held third round of talks.
About India-UAE Business Relations:
- UAE is India’s third largest trading partner with bilateral trade of US$ 60 billion in the year 2019-20.
- UAE has been India’s third largest commodity export market (after the US and China) in FY21.
- The United Arab Emirates is the eighth largest investor in India. It has invested US$11 billion between April 2000 and March 2021.
Significance of the Agreement:
- Through this, bilateral merchandise trade is expected to grow to $100 billion in the next five years.
- The business is worth $43 billion in FY21. The UAE is the gateway to all of Africa and many other parts of the world.
- A large number of Indian expatriates also reside in the United Arab Emirates. It is a huge market for textiles, gems and jewellery, leather, footwear and food products.
- The agreement is a part of India’s broader strategy to establish fair and balanced trade agreements with major economies.
- The agreement has become even more important especially after India was not part of the China-dominated Belt and Road Initiative.
About Comprehensive Economic Partnership Agreement (CEPA):
- As countries enter the next phase of free trade agreements, they agree to greater economic integration. This results in the Comprehensive Economic Cooperation Agreement (CECA) or CEPA or a combination thereof.
- CECA cover only reduction/abolition of tariffs in a phased manner on listed/subsequent items except negative list and tariff rate quota items.
- CEPA also covers trade in services and other areas of investment and economic partnership.
Source – The Hindu