Trade boost: India-UAE free trade agreement talks from today, deal by March

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September 23, 2021 4:30 AM

In fact, the UAE was India’s second-biggest goods export market until FY20, behind only the US, before China pipped it in FY21 when the pandemic caused severe disruptions in trade.

Addressing media jointly with Thani bin Ahmed Al Zeyoudi here, the UAE’s minister of state for foreign trade, Goyal said both the sides have drawn up “a very aggressive and ambitious time frame” to conclude negotiations.Addressing media jointly with Thani bin Ahmed Al Zeyoudi here, the UAE’s minister of state for foreign trade, Goyal said both the sides have drawn up “a very aggressive and ambitious time frame” to conclude negotiations.

India and its third-largest export market, the UAE, will begin formal negotiations for a “mutually-beneficial” comprehensive economic partnership agreement (CEPA) here from Thursday, commerce and industry minister Piyush Goyal said on Wednesday.

Both the sides aim to wrap up negotiations by as early as December 2021 and sign a deal by March 2022 after the completion of internal legal procedures and necessary ratification processes, Goyal said. It would be the first free trade agreement (FTA) to be signed by India in just over a decade.

The proposed FTA, to be formally called CEPA, is expected to raise bilateral merchandise trade to $100 billion in five years following the signing of the pact from about $43 billion in FY21. It also aims to more than double bilateral services trade to $15 billion during this period.

Addressing media jointly with Thani bin Ahmed Al Zeyoudi here, the UAE’s minister of state for foreign trade, Goyal said both the sides have drawn up “a very aggressive and ambitious time frame” to conclude negotiations.

The negotiations with the UAE are a part of India’s broader strategy to forge “fair and balanced” trade agreements with key economies and revamp existing pacts to boost trade. The move gained traction after India pulled out of the China-dominated RCEP talks in November 2019. Balanced FTAs will also enable the country to achieve sustained growth rates in exports in the coming years. Already, India has set an ambitious merchandise export target of $400 billion for FY22, against $291 billion in FY21.

In fact, the UAE was India’s second-biggest goods export market until FY20, behind only the US, before China pipped it in FY21 when the pandemic caused severe disruptions in trade.

India was the UAE’s second-largest trading partner before the pandemic struck. The UAE is the eighth-largest investor in India, having invested $11 billion between April 2000 and March 2021, while investment by Indian firms in the UAE is estimated to be as high as $85 billion during this period.

India’s major exports to the UAE include petroleum products, precious metals, stones, gems and jewellery, textiles and garments, food items, engineering goods and chemicals. Its main imports from the UAE include petroleum and petroleum products, precious metals, stones, gems and jewellery, minerals, chemicals and wood and wood products.

Both Goyal and Al Zeyoudi also agreed to bolster the “rules-based, transparent, non-discriminatory, open, and inclusive multilateral trading system embodied by the World Trade Organization” (WTO) at a time when the future of the multilateral institution is under threat from some of its early proponents, including the US. They also agreed to work towards a “balanced and inclusive outcome” at the next WTO ministerial conference in Geneva, Switzerland.

The quick conclusion of the CEPA will “greatly enhance the bilateral trade and investment flows, assist in our post-Covid recovery and future economic growth” and create new employment opportunities, Goyal said.

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