The India-United Arab Emirates (UAE) Comprehensive Economic Partnership Agreement (CEPA) completed three years of its signing on February 18.

Since the signing of CEPA in February 2022, bilateral merchandise trade has nearly doubled from $43.3 billion in FY 2020-21 to $83.7 billion in 2023-24. 

India-UAE CEPA

• India and the UAE inked CEPA on February 18, 2022 year to boost trade ties following a virtual summit between Prime Minister Narendra Modi and the then Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed Al Nahyan. It came into effect on May 1, 2022.

• The trade pact will help in taking the two-way trade to $100 billion in five years.

• Gems and jewellery sector contributes a substantial portion of India’s exports to the UAE and is a sector that is expected to benefit significantly from the tariff concessions obtained for Indian products under the India-UAE CEPA. 

• Overall, India will benefit from preferential market access provided by the UAE on over 97 per cent of its tariff lines which account for 99 per cent of Indian exports to the UAE in value terms particularly from labour-intensive sectors such as gems and jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agricultural and wood products, engineering products, pharmaceuticals, medical devices, and automobiles.

• The UAE is a gateway to the Middle East, North Africa, Central Asia and sub-Saharan Africa. CEPA is expected to help in unlocking new trade routes between Africa and Asia.

• It would generate 10 lakh jobs across multiple labour-intensive sectors.

Objectives of CEPA:

i) Strengthen and enhance trade and economic cooperation in the fields agreed between the Parties.

ii) Liberalise and facilitate trade between the Parties in accordance with the provisions of this Agreement.

iii) Enhance investment facilitation and cooperation between the Parties in accordance with the provisions of this Agreement.

iv) Improve the efficiency and competitiveness of the Parties’ manufacturing and services sectors and to expand trade between the Parties, including joint exploitation of commercial and economic opportunities in non-Parties.

v) Facilitate and enhance regional economic cooperation and integration.

vi) Build upon the Parties’ commitments at the World Trade Organisation (WTO).

Impact of CEPA

• CEPA has been successful in realising its potential of diversification of trade basket as non-oil trade touched $57.8 billion in FY 2023-24 accounting for more than half of the total trade. 

• This is attuned to the target of taking bilateral non-oil trade to $100 billion level by 2030. 

• In terms of utilisation of CEPA preferential duties are concerned, about 2.4 lakh Certificates of Origin have been issued against which total export of $19.87 billion have been made to the UAE.

• While India’s exports to the UAE rose 6.82 per cent to $30 billion during the first 10 months of this fiscal year, imports during this period rose 35.58 per cent to $50.51 billion.

• At the sectoral level, besides refined crude oil products and gems and jewellery products, electrical machinery and equipment, light and medium high technology goods like boilers, generators and reactors and chemicals have been major achievers.

• Besides, at the product level, smartphones have emerged as a major item of export with shipments valued $2.57 billion bound for the UAE during 2023-24.

• The India-UAE CEPA has resulted into a new era of economic partnership and diplomacy for both the nations by empowering MSMEs, generating employment and creating new business opportunities.

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