Highlights of comprehensive economic partnership agreement with India
The United Arab Emirates (UAE) and India Comprehensive Economic Partnership Agreement (CEPA), which aims to strengthen economic ties and boost trade and investment between the two countries, entered into effect on 1 May 2022. Through this CEPA, both the UAE and India are expected to achieve significant economic benefits in the form of liberalization of customs tariffs, simpler customs formalities and procedures, easier access to relevant markets and ease of movement of skilled labor to support the economic initiatives. The UAE Ministry of Economy has launched a web page that provides details of the CEPA.
A CEPA is a trade agreement between two countries that provides preferential trade terms, tariff concessions, services and investments, and other areas of economic partnership. A CEPA also considers factors such as trade facilitation and customs cooperation, competition and access to countries’ intellectual property rights.
The UAE-India CEPA covers 11,908 items and includes goods in various sectors. The CEPA also specifies rules of origin, along with minimum required information, and covers product-specific rules for the import of specific products under CEPA. Some of the main businesses set to benefit from the CEPA are:
- Digital trade
- Intellectual property rights
The CEPA also covers 11 sectors and 100 sub-service sectors that will benefit from this agreement.
The UAE proposes to double its economy in the coming decade and attract top human capital; foreign trade will be an integral pillar of this development and this is where the CEPA is expected to play a pivotal role. India is the UAE’s largest trading partner in terms of exports and the ninth largest recipient of foreign direct investment from the UAE. The CEPA will enhance this existing long-standing relationship and is expected to boost the merchandise trade between the two countries to USD 100 billion over the next five years.
The CEPA will promote economic benefits in various sectors, such as the following:
- Increased investment flows, lower tariffs and new opportunities for key sectors in India and the UAE such as aviation, environment, hospitality, investment, financial services, digital trade, etc.;
- Boost the national economies of both countries; and
- Make it easier for small and medium-sized enterprises to go global by granting them access to new customers, networks and avenues of collaboration. The private sector will benefit from the agreement as it remains at the forefront of innovation and economic growth.
CEPAs or trade agreements are considered to be central to the UAE’s efforts to build the economy over the next 50 years and solidify its position as a global economic hub. The UAE has signed several free trade agreements with countries and trade groups across the world to enhance its position as a global trade hub and major destination for investments (click here for a list of the UAE agreements).