There has been a massive jump in imports of aircraft parts to India from the United Arab Emirates (UAE) after the countries entered into a trade agreement in May last year, data from the commerce and industry ministry showed on Monday.
From just $38.93 million in 2021-22, imports of aviation gear zoomed to $1.93 billion in the previous fiscal. In percentage terms, the increase a whopping 4,859%.
There is no possibility of other countries routing their products through the UAE to take advantage of lower tariffs that the trade agreement offers, as the rules for certificate of origin are quite strict, director general and CEO of Federation of Indian Export Organisations Ajay Sahai said.
As the aviation industry recovered from the shock of pandemic-induced disruptions, data show that overall aircraft-related imports by India stood at around $9 billion in April-February last year, compared with $4.7 billion in entire 2021-22.
Overall imports from the UAE have gone up by 18.8% to $53.2 billion in FY23 while India’s exports to the country rose 11.8% to $31.3 billion. This came at a time when India’s overall merchandise exports grew just 5.3% in FY23 to $444.4 billion and imports rose 16.1% to $613.05 billion.
Crude oil and refinery products remained the biggest item of trade. India’s exports of petroleum products grew 36% year-on-year to $7.78 billion while imports of mineral fuels and oils from the UAE increased 36% to $27.66 billion.
The India-UAE Comprehensive Economic Partnership Agreement came into force on May 1, 2022. The target is to increase the total value of bilateral trade in goods to over $100 billion dollars and that in services to over $15 billion in five years.
Under the trade agreement, the UAE has provided preferential market access on over 97% of its tariff lines, which account for 99% of Indian exports to that country in value terms, especially for all labour-intensive sectors such as gems and jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agricultural and wood products, engineering products, medical devices, and automobiles. India will be offering preferential access on over 90% of its tariff lines, including lines of export interest to the UAE.
“We are hoping that we will be able to reach $50-billion exports to the UAE by 2026-27. I am very sure that the kind of response that we are getting, we will definitely reach that,” commerce secretary Sunil Barthwal said.