India is negotiating trade deals with complementary economies, including the UK, Canada and the EU, at a very rapid pace.
India is negotiating trade deals with complementary economies, including the UK, Canada and the EU, at a very rapid pace.
The India-UAE Free Trade Agreement went into effect on Sunday, giving domestic exporters in various sectors including textiles, agriculture, dried fruit, gemstones and jewelry duty-free access to the UAE’s market.
As a symbolic gesture to implement the agreement, Trade Minister BVR Subrahmanyam presented certificates of origin to three exporters from the gemstone and jewelry industry. These shipments to Dubai will be duty-free under the pact officially dubbed the Comprehensive Economic Partnership Agreement (CEPA). The Central Authority for Indirect Taxes and Customs (CBIC) and the General Directorate for Foreign Trade (DGFT) have issued relevant notifications for the implementation of the agreement from May 1st.
“Today CEPA between India and the United Arab Emirates comes into force. Today we are shipping the first shipment from India to the United Arab Emirates, which will benefit from this deal,” Mr Subrahmanyam said here.
The United Arab Emirates is India’s second or third largest trading partner and this country is a gateway to the Middle East, North Africa, Central Asia and sub-Saharan Africa, he noted.
The trade pact will help grow two-way trade from the existing $60 billion to $100 billion in five years.
“$100 billion is just a start… Over time it will grow to $200 billion and in the coming years to $500 billion,” the minister said, adding that 99% of “our exports go to the United States.” Arab Emirates will be duty-free”.
The Gems and Jewelery sector accounts for a significant proportion of India’s exports to the UAE and is expected to benefit significantly from the preferential tariffs granted to Indian products under this agreement.
Overall, India will benefit from the UAE’s preferential market access on over 97% of its customs lines (or commodities), representing 99% of Indian exports to the UAE by value – particularly from labour-intensive sectors such as textiles, leather, footwear, sporting goods, plastics, and furniture Technical products.
The Secretary underscored the need for Indian products to be competitive in the international market and said there was a need to build and expand domestic capacity. He also shared that India is very fast in negotiating trade deals with complementary economies including the UK, Canada and the EU. Exports of goods and services account for around 22-23% of India’s GDP, noted Mr. Subrahmanyam.
“Our vision is that we bring India to a point where 25-30% of our GDP comes from exports,” he added. The Ministry of Commerce has also strengthened itself in order to be future-proof and to face the challenges of tomorrow with a focus on trade promotion. “We will re-staff the department. They’re going to change over the next few months… We’re going to build a huge trade promotion department,” the secretary said, adding that the focus would also be on data, data analysis and market intelligence.
Regarding trade deals, he said there are two-way deals and both sides should feel like they have something.
The UK, Canada and the EU are all developed economies and they have huge potential for the kinds of things “we make” such as apparel, whole textiles, leather, chemicals, gems and jewellery, the secretary noted.
He also said the ministry analyzes many trade deals and tries to correct them.
“We plan to summarize the agreement (with the UAE for the industry), simplify it and put it in simple bundles so everyone can know where I have the advantage of going through this free trade agreement. We will do that before the end of May,” he added.
