India-UAE Relations: Economic Cooperation and Beyond

During a virtual conference on 18^th February, 2022, India and the United Arab Emirates finalised a Comprehensive Economic Partnership Agreement (CEPA). This Free Trade Agreement (FTA) will lower import tariffs on the vast majority of Indian exports to the country.

• The foundation for a more robust and promising collaboration between India and the UAE has been built by mutually reinforcing economic visions and similar geopolitical outlooks. Technology, finance, and energy underpin the relationship, which is now supported by the most crucial aspect of people-to-people contact.
• In 2021, India was the biggest remittance destination for the UAE, accounting for 33.6 percent of total outflows.

Benefits of CEPA: The CEPA deal is projected to provide India with market access to the entire West-Asian and African areas in industries such as gems and jewellery, textiles, leather goods, and software exports via the United Arab Emirates. Furthermore, India's industry may profit from the UAE's superior multimodal transport and logistics infrastructure by using these as trade hubs with Africa and Europe.

• The UAE would gain improved market access to India for vital exports such as petrochemicals, metals, and dates under the terms of the deal. With India on track to overtake China as the world's third-largest economy in the early part of the next decade, possibilities for UAE corporations in the oil and non-oil sectors are expected to rise tremendously.
• The Free Trade Agreement (FTA) is expected to lower tariffs on 80% of items and provide duty-free access to 90% of India's exports to the UAE.
• A criterion of "melt and pour" for steel exports to qualify as domestically made items from either nation was inserted in the agreement to protect both economies from third-party abuse of the arrangement.
• The agreement also establishes a permanent safeguard system to protect firms in both countries from an unnecessarily or unjustified increase in the volume of (imports) any given commodity.
• The trade agreement will benefit Indian and UAE enterprises in a number of ways, including increased market access and lower tariffs. In the next five years, bilateral trade will expand from $60 billion to $100 billion as a result of CEPA. The deal will generate a million job chances for our youngsters and a plethora of prospects for our MSMEs. For both economies, it's a win-win situation.