India-UAE trade pact may come into force on May 1st: Goyal

Business

Key areas of India’s interest are computer related services, audio visual, education, health, tourism, travel, professional services such as nursing, engineering and accounting.

Key areas of India’s interest are computer related services, audio visual, education, health, tourism, travel, professional services such as nursing, engineering and accounting.

The India-UAE Free Trade Agreement is expected to come into force on May 1 this year, under which domestic exporters of up to 6,090 goods from sectors such as textiles, agriculture, dried fruits, gemstones and jewelry would be granted duty-free access to the UAE’s market, Handels- and Industry Minister Piyush Goyal on Sunday.

The Comprehensive Economic Partnership Agreement (CEPA) was signed by India and the United Arab Emirates (UAE) in February, which aims to boost bilateral trade from the current $60 billion to $100 billion over the next five years.

The minister said the full text of the pact has been made public and now “we are trying to complete all our paperwork and customs declarations expeditiously. We hope to have it operationalized by May 1, 2022.”

Overall, the UAE offers duty exemption on over 97% of its products, accounting for 99% of Indian exports here by value.

Immediate duty-free access includes all labor-intensive sectors such as gems and jewellery, textiles and clothing, agricultural and seafood products, leather, footwear and sporting goods, pharmaceutical and medical equipment and many technical products.

“Currently, we export about US$26 billion worth of goods to the UAE, almost 90% of which are self-exempted from duties (or duties) entirely on day one. In the next 5-7 or 10 years, the rest of the 9.5% (about 1,270 goods) will also be duty-free,” Mr Goyal said here at Dubai Expo.

Explaining the importance of the pact, he said the UAE had also opened doors to the rest of the Middle East, some parts of Africa and Europe.

“This opens up tremendous opportunities for Indian companies,” he said, adding that the pact also opens doors to several service sectors that will expand job opportunities for Indian boys and girls.

Key areas of India’s interest are computer related services, audio visual, education, health, tourism, travel, professional services such as nursing, engineering and accounting.

“We’re also working on Mutual Recognition Agreements (MRAs) of professionals and qualified services so that when they approve our nursing schools, that college’s nursing degree is automatically recognized and vice versa,” he said.

On the other hand, India has offered significant concessions on commodities of export interest to the UAE, including dates, petroleum products (crude oil, LPG, naphtha), petrochemicals (polyethylene, polypropylene and polyvinyl chloride), metals (aluminium, copper, nickel, iron and steel), minerals ( limestone, cement).

India grants duty-free access to 7,694 goods on the implementation day of the agreement. About 2,400 goods would be duty-free over a 5-10 year period.

As part of the pact’s safeguards, strict rules of origin apply, reflecting the requirement for up to 40% substantial processing for most products and fully recovered criteria for agricultural products.

Asked about the Free Trade Agreement with the Gulf Cooperation Council (GCC), Mr Goyal said: “We are at an advanced stage of discussion on the scope of the agreement. I believe the discussions will be completed in the next 15-20 days.”

After that, he said, “we hope to start formal negotiations for a broad free trade agreement with all GCC countries, and that will open up the entire Middle East to Indian goods and services.”

Mr Goyal, who will attend the India-UAE business forum on March 29, said the goal of the meeting is to expand business ties between the countries.

Companies expected to attend the meeting include Anish Shah of Mahindra and Mahindra, Bajaj Finserv CMD Sanjiv Bajaj, Vedanta Resources Chairman Anil Agarwal, ITC CMD Sanjiv Puri, Apollo Hospitals Joint MD Sangita Reddy, Bharti Airtel Joint MD Rajan Mittal, Dr. Satish Reddy, Chairman of Reddy’s Laboratories Ltd and Byju Raveendran, co-founder of Byju.

On March 28th there will also be a roundtable on startups. Around 20 startups are expected to attend this gathering, including OyoRooms’ Ritesh Agarwal, Zomato’s Deepinder Goyal, EaseMyTrip’s Nishant Pitti, Accel Ventures’ Prashant Prakash, and Aavishkaar Group’s Vineet Rai.

Speaking about the India Pavilion here at Dubai Expo 2020, Mr Goyal said it would be a permanent structure.

“India was honored along with the United Arab Emirates and Saudi Arabia, as well as Morocco. We will continue to have the opportunity to use this area (India Pavilion) to act as an intermediary for a small piece of India in the United Arab Emirates,” he added.

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