Dubai: The UAE and India have signed a trade and economic partnership that will remove 80 per cent of the customs tariffs on goods produced and shipped out from the countries. The other 20 per cent will be phased out over time, and sets up a trade alliance that could touch $100 billion in the next five years from $60 billion plus now.
The deal, called the Comprehensive Economic Partnership Agreement (CEPA), was signed in the virtual presence of His Highness Sheikh Mohamed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and Prime Minister Narendra Modi of India.
“This agreement, which is considered the first of its kind, is among the economic projects that the UAE has set out for the next 50 years,” said Sheikh Mohamed. “This provides a strong basis for the continuous expansion of our common interest for the benefit of our people and for the fulfilment of their aspirations and better prosperity.”
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UAE-led investments into India will translate into millions of new jobs, such as in the plastics industry which will also benefit from technology support.
You are celebrating 50 years of the formation of UAE and you have also defined a vision for the coming 50 years for UAE. India also is celebrating 75 years of its independence in the form of a festival and we have set an ambitious target for the coming 25 years. There are several similarities in the future vision of both countries.
A ‘reliable partner’
In his statement, Prime Minister Modi said: “Trade, investment, energy, and people-to-people contacts have been the pillars of our cooperation. At the same time, there are possibilities of enhancing cooperation in several new areas.
“The new MoU between us on food corridors is a very good initiative. We welcome investment from UAE in the areas of food processing and logistics. With this, India can become a reliable partner for UAE’s food security.”
Effective from May 1
The CEPA deal, which is the first trade deal entered into by India’s BJP-led NDA government, will formally take effect from early May, once the internal processes are completed in either country, according to Piyush Goyal, India’s Minister of Commerce and Industry.
The deal, details of which are still to come out in full, will provide the big banh needed for trade between UAE and India to move up a few gears. That up to 80 per cent of the goods traded will be covered under tariff concessions does push the possibilities for an immediate and significant spike in volumes.
On the areas that are not covered by the deal – the 20 per cent – Goyal said that these are areas of strategic interests to both countries and will require time for the duty structures to be rolled back.
Spread the word
India has invited top UAE Government officials in the first week of May to have round-table discussions with the country’s business community and get the word out on what CEPA could deliver as a win for all parties.
In his speech, Modi said: “Last year, alone India has seen the emergence of 44 unicorns. We can encourage startups in both of our countries by way of joint incubation and joint financing. Similarly, we can cooperate in modern institutions of excellence for the development of skills for our people.”
With CEPA, the “sky is the limit” for the UAE and India to achieve their ambitions and share in them.