The strong India-UAE Relation: 2022-2023

Theme:

The India-UAE relationship is booming and benefitting more people in the country by boosting India’s economy. UAE has become the 4th largest investor in India. India’s approach toward Free Trade Agreements (FTAs) is undergoing with more awareness of reaching meaningful markets to get admission to and facilitating the integration of the Indian industry into worldwide value chains.

In this weblog let us know more about the India-UAE relationship, history, data and much more.

 

CEPA

CEPA – Comprehensive Economic Partnership Agreement (CEPA) between the Government of the Republic of India and the Government of the United Arab Emirates (UAE).

• CEPA is a full and deep Agreement signed on 18 February 2022, during a virtual summit between the Prime Minister of India, Shri Narendra Modi and the President of the UAE and Ruler of Abu Dhabi, Highness Sheikh Mohamed bin Zayed Al Nahyan.
• CEPA entered into force on 01 May 2022. The Commerce Secretary said that both sides are continuing to work together to further improve the Ease of Doing Business between the two countries. Representatives from Industry mentioned the experience of leveraging upon the CEPA to register significant growth in their respective sectors.

India-UAE Relation 2023

• Utilization of the India-UAE CEPA has been increasing steadily on a month-on-month basis. The number of Preferential Certificates of Origin (COOs) issued under the CEPA increased from 415 in May 2022 to 8440 in March 2023.
• Over 54,000 COOs were issued under the CEPA during the 11-month (May 22 – March 23) period.

India-UAE bilateral relations – The History

• India and the UAE installed diplomatic members of the family in 1972.
• The extra push has been done by bilateral family members while the visit of India’s Prime Minister to the UAE in August 2015 marked the beginning of a new strategic partnership between the two nations.
• Further, for the duration of the visit of the Crown Prince of Abu Dhabi to India in January 2017 as the chief visitor at India’s Republic Day celebrations, it turned into an agreement that bilateral family members had been to be upgraded to a comprehensive strategic partnership.
  This gave momentum to launch negotiations for an India-UAE complete financial partnership agreement.

What is the Economic Significance of the India-UAE relationship?

• The UAE has emerged as an important economic hub not just within the context of the Middle East/West Asia, but additionally globally.
  The UAE, because of its strategic location, has emerged as an essential financial centre globally.
• In recent years, the UAE, through its ‘Vision 2021’, has sought to diversify its financial system and decrease its dependency on oil.
  Since 2012, the increase has been led, in step with a World Trade Organisation file, with the aid of the non-hydrocarbon sectors reflecting the hit diversification of the economy.
• Although the UAE has various its economy, the hydrocarbon region stays very essential followed through offerings and manufacturing.
  Within services, financial services, wholesale and retail change, and real estate and business services are the principal individuals.

What About India’s Economic Ties with UAE?

• The India-UAE overall alternate merchandise has been worth U.S.$52.76 billion for the first six months of 2022-23, making the UAE India’s 1/3 largest trading accomplice.
• The purpose is to reinforce bilateral products change to above U.S.$100 billion and services alternate to U.S.$15 billion in 5 years.
• An alternate agreement is likewise an enabler for 2-way investment flows. The UAE’s funding in India is anticipated to be around U.S.$ 11.67 billion, which makes it the 4th biggest investor in India.
• Also, many Indian groups have set up production units both as joint ventures or in Special Economic Zones for cement, constructing substances, textiles, engineering merchandise, client electronics, and so forth, in the UAE.
• Many Indian companies have also invested in the tourism, hospitality, catering, health, retail, and education sectors.
• Under India’s made over FTA strategy, the Government has prioritised at least six countries/areas to address, which the UAE figures on the pinnacle of the listing for an early harvest deal (or Interim Trade Agreement), the others are the United Kingdom, the EU, Australia, Canada, Israel and a group of countries in the Gulf Cooperation Council (GCC).
• The UAE too announced in advance its intention to pursue bilateral monetary agreements with India and seven different countries (U.K., Turkey, South Korea, Ethiopia, Indonesia, Israel, and Kenya).

What is an Interim Trade Agreement (ITA)?

• An interim or early harvest trade settlement is used to liberalise tariffs at the alternate of sure items between international locations or trading blocs before a complete FTA is concluded.
• The authorities’ emphasis on meantime agreements can be tactical so that a deal can be completed with minimal commitments and might allow for contentious issues to be resolved later.
• Recently, India and Australia announced plans to finish an ITA.

Salient Features of CEPA:

Trade in Goods:

• The CEPA affords preferential marketplace get right of entry to over 80% of products traded between India and the UAE.
• India will enjoy the discount or removal of price lists on its exports to the UAE, specifically in sectors such as gems and jewellery, textiles, leather-based, footwear, sports activities goods, plastics, furniture, agricultural and wooden merchandise, engineering merchandise, clinical gadgets and cars.

Trade in Services:

• The CEPA covers 11 broad carrier sectors and greater than 100 sub-sectors, including business offerings, communique services, production and associated engineering offerings, distribution services, instructional services, environmental services, financial services, health-associated and social offerings, tourism and travel-related offerings, leisure cultural and sporting offerings and transport offerings.
• Both nations have provided enhanced marketplaces to get an entry for each different service carrier across these sectors.

Investment:

• The CEPA presents a liberal and non-discriminatory regime for pass-border investment between India and the UAE.
• It additionally includes provisions for, dispute agreements and cooperation on funding facilitation.

Some Other Areas of Cooperation:

• Protection and promotion of investments
• Technical barriers to trade (TBT)
• Sanitary and phytosanitary (SPS) measures
• Dispute settlement
• Movement of natural persons
• Pharmaceutical products
• Intellectual property rights (IPR)

Indian Exports to the UAE:

• At present, Indian exports to the UAE elevated from USD 28 billion to USD 31.3 billion (same period as above); an 11.8% year-on-year growth in percentage phrases.
• During the equal length, growth in India’s global exports turned to 5.3%, excluding the UAE, India’s international exports grew at 4.8%.

Sectors that Witnessed Significant Export Growth:

• Mineral Fuels
• Electrical Machinery (particularly telephone equipment)
• Gems & Jewellery
• Automobiles (Transport vehicles segment)
• Essential Oils/Perfumes/Cosmetics (Beauty/Skin care products)
• Other Machinery
• Cereals (Rice)
• Coffee/Tea/Spices
• Chemical Products

Conclusion:

India will enjoy the discount or removal of price lists on its exports to the UAE, specifically in sectors such as gems and jewellery, textiles, leather-based, footwear, sports activities goods, plastics, furniture, agricultural and wooden merchandise, engineering merchandise, clinical gadgets and cars. Both nations have provided enhanced marketplaces to get an entry for each different’s service carrier across these sectors.