The proposed free trade agreement (FTA) with the UAE can result in enhanced exports of several sectors, including gem and jewellery, engineering, leather goods and chemicals to the Emirates as the pact would enhance competitiveness of domestic traders, according to exporters. India has started negotiations for the agreement with the UAE, which is the third largest trading partner of New Delhi.
Under a free trade agreement, two trading partners reduce or eliminate customs duties on the maximum number of goods traded between them. Besides, they liberalise norms to enhance trade in services and boost investments.
Gems and Jewellery Export Promotion Council (GJEPC) Chairman Colin Shah said that the proposed FTA with the UAE can result in enhanced exports of gem and jewellery products to the Emirates which is really required presently as the exports from the sector to the UAE have declined significantly to USD 2.77 billion in 2020-2021 due to the Covid-19 pandemic situation. “The UAE is India’s one of the top three major export markets for gem and jewellery products,” he said.
He said the council has suggested the government to seek abolition of import duty in the UAE on the exports of gold, silver and platinum jewellery from India; besides reduction of import duty from 7.5 per cent to 4 per cent in India on the imports of gold bars/silver bars/platinum bars from the UAE.
Reduction in import duty on gold from the UAE would help the domestic gems and jewellery sector and also cut smuggling of the yellow metal in the country.
Council for Leather Exports (CLE) said that there is a lot of potential for Indian exporters in the UAE, which has a huge Indian diaspora. There is a huge potential for exports in areas like footwear, and leather goods. Export of leather, leather products and footwear from India to the UAE was $ 169.86 million during 2019-20. Bilateral trade between India and the UAE stood at $ 43.3 billion in 2020-21. Exports were $ 16.7 billion and imports aggregated at $ 26.7 billion in 2020-21.