Government authorities anticipate that exports to the UAE will exceed USD 50 billion by the fiscal year 2026-2027 as India’s Comprehensive Economic Partnership pact (CEPA) trade pact with the UAE has become the “fastest used.”
On the first anniversary of the agreement, Sunil Barthwal, the secretary of commerce, informed reporters that “we will complete five years of (signing) CEPA in 2026–27, and we should be able to reach USD 50 billion in exports.”
“Trade between the two nations has risen significantly. Emerging industries with high labour costs have expanded. Excellent use has been made of CEPA. In contrast to other free trade agreements (FTAs), a large portion of trade takes place through privileged channels in this FTA, according to Barthwal.
In terms of usage between May 2022 and March 2023, the India-UAE CEPA fared essentially better than all other FTAs, according to a Commerce Department assessment. India received the most certificates of origin (COO) from the Association of Southeast Asian Nations (ASEAN), totalling 1.49 lakh. The trade partnership with the UAE came next, and exporters were given 54,142 COOs to take advantage of the trade pact’s favourable duty advantages.
According to government sources, the execution of the trade agreement’s finer elements will be exact following a meeting of the joint mechanism established by both countries next month and a more thorough data exchange with the UAE.
India exported commodities worth USD 31.3 billion during the fiscal year April–March 2022–2023 (FY23), indicating an increase of 4.8% year over year (YoY), according to preliminary figures supplied by the Department of Commerce. India’s total merchandise exports rose by 5% to USD 444 billion during the same period.
The rise in exports can be attributed to higher demand from sectors including equipment, cars, and gems and jewellery. Due to restrictions and weak demand, respectively, exports of goods including iron and steel and textiles decreased.
India will also investigate other trade barriers, such as those related to doing business and problems with certification or rules of origin, and work to remove them. These issues will be addressed through a collaborative approach.
Under the terms of the trade agreement, both nations have extended duty reductions on the export of goods that benefit both parties. Nearly 97 percent of India’s tariff lines received reductions from the UAE, representing 99 percent of trade in terms of value. India has provided the UAE exclusive access to over 90% of its tariff lines, including those that are relevant to the UAE’s exports.