The free trade agreement (FTA) between India and the UAE is likely to come into effect from 1st May this year, under which domestic exporters of over 6,000 goods from sectors like textiles, agriculture, dry fruits, gems and jewellery would get duty-free access to the UAE market, Commerce and Industry Minister Piyush Goyal said.
India and the UAE have also agreed to set up a technical council on Investment, Trade Promotion and Facilitation, as part of the Comprehensive Economic Partnership Agreement (CEPA) signed between the two countries last month.
India and the UAE on February 18 had signed CEPA to boost bilateral trade to $ 100 billion in the next five years from current $ 60 billion. The pact covers areas including goods, services, rules of origin, customs procedures, government procurement, intellectual property rights, and e-commerce.
Under the agreement, the two trading partners reduce or eliminate customs duties on the maximum number of goods traded between them. “UAE will be chaired by the Under Secretary of the Ministry of Finance, or the authorised representative thereof, and India will be chaired by the Joint Secretary (or equivalent), Department for Promotion of Industry and Internal Trade, Government of India,” the text of the CEPA agreement said.
The council will also identify and work towards the removal of impediments and facilitate investment and trade flows and seek views of the private sector.
The UAE is India’s third-largest trade partner. Bilateral trade between India and the UAE stood at $ 43.3 billion in 2020-21. Exports were worth $ 16.7 billion and imports aggregated at $ 26.7 billion in 2020-21. The two-way trade commerce stood at $ 59.11 billion in 2019-20.
“Currently, we are exporting about $ 26 billion worth of goods to the UAE , almost 90 per cent of them will get total tariff (or customs duty) elimination on Day 1 itself. Going forward in the next 5-7 or ten years, the rest of the 9.5 per cent (about 1,270 goods) will also get zero duty,” Goyal said at the Dubai Expo. India will be giving duty-free access to 7,694 goods on the day of implementation of the agreement. Around 2,400 goods would get zero duty in 5-10 years period.