NEW DELHI : India and the United Arab Emirates on Friday signed a comprehensive trade and economic pact that is expected to boost bilateral trade to $100 billion in the next five years from $60 billion now.
The accord was signed by commerce and industry minister Piyush Goyal and UAE’s minister of economy Abdulla bin Touq Al Marri in the virtual presence of Prime Minister Narendra Modi and Crown Prince of Abu Dhabi Sheikh Mohamed bin Zayed al Nahyan.
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Addressing a press conference, Goyal said Indian gems, textiles, leather and sports goods will benefit from the deal. Under the pact, India agreed to provide tariff concessions on gold imports, while the UAE eliminated tariffs on jewellery imports into that country.
Further, in a major boost for pharma companies, UAE has agreed to allow market access for medicines from Indian companies within 90 days of approval in the US and UK.
“The most important thing in CEPA (Comprehensive Economic Partnership Agreement) is reduction of tariffs on up to 80% of goods traded between the two nations. You are going to see the reduction in a couple of years," said the UAE economy minister.
Goyal said around 80% of goods and services were included in the deal. The rest 20% includes goods that are “sensitive" for domestic businesses and would require more time to reach a state when tariffs can be lowered.
A joint vision statement issued by Modi and the crown prince said the shared objective was to promote new trade, investment and innovation in diverse areas, including economy, energy, climate action, emerging technologies, food security, defence and security. The joint statement agreed on a road map for a future-looking partnership between the two nations.
Goyal said: “It is time to reset our relationship and take it to greater levels than it was before".
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He further said the CEPA is not an interim agreement, but it is a comprehensive agreement finalised in the “shortest possible" time of just 88 days.
Along with trade remedies, the deal provides a safeguard mechanism for both countries’ businesses against an unnecessary surge in the flow of products.
The deal is expected to come into effect within the next 60 days, by the first week of May.
It also focuses on expediting work on a dedicated investment zone for UAE companies and joint ventures, focusing on setting up a food corridor and establishing a dedicated India Mart in the Jebel Ali Free Zone.
The pact will create investment opportunities for Indian investors in establishing specialised industrial advanced technology zones in Abu Dhabi, focusing on logistics and services, pharmaceuticals agriculture, steel and aluminium.
India’s exports to UAE grew by 77% year-on-year in April-December 2021 to $20 billion, accounting for 6.6% of India’s total outbound shipments.
Dilasha Seth contributed to this story .
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