India, UAE to sign trade pact by March 2022

Plan to raise bilateral trade to $100 bn in 5 yrs

India and the United Arab Emirates (UAE) have formally launched negotiations on a Comprehensive Economic Partnership Agreement (CEPA) that aims at expanding bilateral trade and investment between the two nations. The first round of CEPA negotiations will be held on Thursday and Friday. Both the nations aim to sign a deal in six months.

A new strategic economic agreement between both the nations is expected to increase bilateral trade in goods to $100 billion within five years.

“Both sides will aim to conclude negotiations by December 2021 and sign a formal agreement in March 2022 after the completion of internal legal procedures and ratification,” said commerce and industry minister Piyush Goyal. He held a meeting with Thani bin Ahmed Al Zeyoudi, UAE’S minister of state for foreign trade, in the national capital. A trade deal, if

worked out between both the nations, will be the first in a bunch of trade agreements that India aims to ink with other developed nations over the next few months. UAE is currently India’s third-largest trading partner in bilateral trade and the second-largest export destination after the US.

On UAE’S part, India was its second-largest trading partner in 2019.

UAE is also the eighth-largest investor in India, having invested $11 billion between April 2000 and March 2021. Investment by Indian companies in the UAE is estimated to be over $85 billion. Goyal said that both the nations decided that discussions should focus on items that would have an early impact on trade. It was decided that items in which there is a clear competitive and comparative advantage for trade between the two nations will be the focus areas, he said.

For India, items of interest will be textiles, jewellery, footwear, leather products and handicrafts. On the UAE’S side, focus areas will be fintech, food, medical equipment, petrochemical equipment and byproducts, among others, Thani said.

India’s major exports to the UAE include petroleum products, precious metals, stones, gems and jewellery, minerals and food items such as cereals, sugar, fruits and vegetables, tea and meat. They also include textiles, engineering and machinery products, and chemicals.