India and the United Arab Emirates (UAE) signed a bilateral “comprehensive” trade pact on Friday. Announcing the Comprehensive Economic Partnership Agreement (CEPA), the biggest trade pact of the last seven years, Prime Minister Narendra Modi welcomed investment from the Gulf country into Jammu and Kashmir and said the initiative would open new routes for regional trade and connectivity and advance “collective interests” of India, Israel, the UAE and the United States. Commerce and Industry Minister Piyush Goyal said the CEPA would have strong anti-dumping measures.
“This agreement will herald a new age in our financial relations. Our trade in the next five years will increase from $60 billion to $100 billion,” said Mr. Modi, thanking Crown Prince of Abu Dhabi Sheikh Mohamed bin Zayed Al Nahyan who participated in the summit virtually.
Collective goals
“Both our countries have been working with partners with similar ideas. I am confident that the grouping of ‘India-UAE-Israel-USA’ will advance our collective goals, especially in the fields of technology, innovation and finance,” Mr. Modi said announcing the broader contours of the trade deal. He strongly condemned the January 17 terror attack on the UAE that claimed the lives of two Indian nationals. “We will stand shoulder to shoulder with the UAE in the fight against terrorism,” assured the Prime Minister.
During the virtual summit meeting, a Memorandum of Understanding (MoU) was signed between the International Financial Services Centers Authority (IFSCA), GIFT City and the Abu Dhabi Global Market Financial Services Regulatory Authority (FSRA). Another MoU covered building of food corridors. “The MoU on food corridors is a very good initiative. We welcome investment from the UAE into food processing and logistics sectors,” said Mr. Modi. Informed sources said the deal would cover 90% of India’s exports to the UAE. Indian exports are expected to benefit from the “zero duty from day one of the entry into force of the agreement”.
Negotiated over 88 days
The agreement is the first of the several such deals that India is currently negotiating with several countries across the world as part of the “post-pandemic recovery”. Some of the trade pacts will be interim in nature because of the complexities involved but the one with the UAE negotiated over 88 days is crafted by keeping long term objectives in view, said the Indian side. “It’s a complete and comprehensive agreement completed in the shortest possible time,” said Mr. Goyal, presenting some of the salient features of the pact. Plastic, agriculture food products, automobile, engineering, pharmaceuticals are some of the areas that will be boosted because of the pact, said the Minister.
Mr. Goyal said that as part of a friendly gesture, the UAE had agreed to recognise Indian pharma products within three months after they were recognised by advanced economies of the West through “rigorous” process. He presented the deal as a move that would have “far-reaching implication for the global economy” and provide economic opportunities.
“The deal will open up to 10 lakh jobs for the young people in the country,” said Mr. Goyal. Official sources informed that the pact would open access to broader African and Asian markets for India. They argued that the “substantial net gains for India” will be visible in the labour-intensive industries such as gems and jewellery, leather, furniture, wood products, agriculture, medical devices, pharma and automobiles. The pact, the sources said, would help boost trade over goods to $100 billion over five years.
“Last month the Lieutenant Governor of Jammu and Kashmir paid a successful visit to the UAE. After that several Emirati companies have displayed interest in investing in Jammu and Kashmir. We welcome the UAE’s investment in the logistics, healthcare, hospitality and all other sectors of Jammu and Kashmir,” said Mr. Modi.
