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Introduction
Objectives
Current trade with Unites Arab Emirates
Key features and benefits
Benefits for India
Comment
Introduction
After recently singing a free trade agreement with the United Kingdom, an Economic Cooperation and Trade Agreement with Australia, and previously comprehensive economic partnership agreements (CEPAs) with Japan and South Korea in 2009 and 2011 respectively, India has now signed the first comprehensive agreement of this decade with the United Arab Emirates. This new CEPA is India's first free trade agreement and comprehensive agreement with any Gulf Cooperation Council (GCC) country, and also the fastest agreement concluded, in merely 88 days. The agreement was signed on 18 February 2022 and is expected to come into force on 1 May 2022.
Under this agreement, India's positive list of offers to the Unites Arab Emirates covers about 90% of India's tariff lines, while the Unites Arab Emirates' list of offers to India covers about 97% of the Unites Arab Emirates' tariff lines. This means that the Unites Arab Emirates will have access to 90% of India's tariff lines at preferential import duties, while India will have access to 97% of the United Arab Emirates' tariff lines at preferential import duties.
This agreement will bolster the trade of a large number of goods from sectors such as:
Through this agreement, India aims to boost bilateral trade with the Unites Arab Emirates in the next five years, with a view to reach profits of $100 billion.
Objectives
More precisely, the objectives that India wants to meet through this CEPA are:
Current trade with Unites Arab Emirates
The estimated current bilateral trade in goods between India and the Unites Arab Emirates in 2021 is over $60 billion. The trade map table below – in billions of US dollars – provides the trade statistics of the last decade between both countries.
Year
India's imports
India's exports
Total trade
Trade balance
2011
35.47
37.37
72.84
1.90
2012
37.80
35.78
73.58
-2.02
2013
32.96
33.98
66.95
1.02
2014
27.29
32.92
60.21
5.63
2015
20.29
30.24
50.53
9.95
2016
19.24
30.68
49.91
11.44
2017
23.11
30.02
53.13
6.92
2018
27.02
29.10
56.12
2.08
2019
30.31
29.54
59.85
-0.77
2020
23.90
17.95
41.85
-5.95
India's exports to the Unites Arab Emirates are well diversified. India's major export items to the Unites Arab Emirates are:
India's major import items from the Unites Arab Emirates are:
Key features and benefits
The following are the CEPA's key features and benefits for India:
Benefits for India
Comment
This new CEPA is expected to push bilateral trade to $100 billion in the next five years. The agreement has vast coverage in terms of cooperation between the two countries, including a free trade area. This will help India to utilise the Unites Arab Emirates' resources and do appropriate resource allocation within the free trade area.
At the same time, this agreement allows India to use its rights under the WTO in case of dumping or export of subsidised material causing injury. The CEPA also contains a provision of bilateral safeguards to check the surge of any non-essential imports in the Unites Arab Emirates.
For further information on this topic please contact Nihit Gupta or Ashutosh Kashyap at TPM Solicitors & Consultants by telephone (+91 11 4989 2200) or email ([email protected] or [email protected]). The TPM Solicitors & Consultants' website can be accessed at www.tpm.in.
