• Piyush Goyal, India’s Minister of Commerce and Industry and Thani bin Ahmed Al Zeyoudi, United Arab Emirates Minister of State for Foreign Trade formally launched negotiations on the India-United Arab Emirates Comprehensive Economic Partnership Agreement (CEPA).

• Looking to build on the progress made by both countries under the Comprehensive Strategic Partnership signed in 2017, both ministers expressed a desire to reach a mutually beneficial economic deal. 

• Both sides will aim to conclude negotiations by December this year and sign a formal agreement in March 2022 after the completion of internal legal procedures and ratification. 

• CEPA will enhance bilateral trade and investment flows and it will assist in  post-COVID economic recovery and future economic growth.

• The two sides will identify the focal point within the discussion of the free trade agreement and the early harvest component. 

• Both ministers emphasised that CEPA will create new jobs, raise living standards, and provide wider social and economic opportunities in both nations.

• A new strategic economic agreement is expected to increase bilateral trade in goods to $100 billion within five years of the signed agreement and increase trade in services to $15 billion.

India-UAE trade relations

• The UAE is currently India’s third-largest trading partner with bilateral trade in 2019-20 valued at $59 billion. The UAE is also India’s second-largest export destination after the US, with exports valued at about $29 billion in 2019-20. 

• India was the UAE’s second-largest trading partner in 2019, with bilateral non-oil trade valued at $41 billion. 

• The UAE is the eighth-largest investor in India, having invested $11 billion between April 2000 and March 2021, while investment by Indian companies in the UAE is estimated to be over $85 billion.

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

• Imports from the UAE include petroleum and petroleum products, precious metals, stones, gems and jewellery, minerals, chemicals and wood and wood products. 

• India imported $10.9 billion of crude oil from the UAE in 2019-2020.

CEPA with other countries

• CEPA between India and South Korea was signed in August 2009 which came into force from January 1, 2010. The two sides have commenced negotiations for the upgradation of CEPA.

• CEPA between India and Japan was signed in February 2011 which came into force in August 2011. India has requested Japan to initiate the process of review of the Agreement to ascertain mutual gain to both the countries. 

• India and Bangladesh are engaged in strengthening the trade relations by exploring prospects of entering into a bilateral CEPA covering goods, services and investment.

• In 2010, Canada and India launched negotiations toward a Comprehensive Economic Partnership Agreement (CEPA). So far, 10 rounds of negotiations have been held, with the last round held in New Delhi in August 2017 followed by an inter-session meeting held in February 2018.

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