The UAE-India free trade agreement (FTA) came into effect on May 1, 2022, with the completion of all constitutional and legal processes surrounding the pact.
Indian Commerce Secretary Mr. BVR Subrahmanyam officially flagged off the first consignment of goods comprising jewelry products to the UAE under the trade pact, termed as the Comprehensive Economic Partnership Agreement (CEPA), in New Delhi. The consignment will now attract zero customs duty under the trade agreement.
The gems and jewelry sector accounts for a significant part of India’s exports to the UAE and is expected to gain immensely from the pact’s tariff concessions. The India-UAE CEPA, which was signed in February 2022, will benefit almost 90 percent of India’s exports in terms of value.
The UAE is offering overall duty elimination on more than 97 percent of its tariff lines corresponding to 99 percent of India’s exports in terms of value. Indian exporters will now get immediate zero-duty market access in labor-intensive sectors, such as leather, footwear, gems, and jewelry, furniture.
The agreement is expected to boost the total value of bilateral trade in goods to more than $100 billion and in services to over $15 billion within five years. The CEPA also includes a permanent safeguard mechanism during any sudden and irrational spike in imports, a move aimed at protecting domestic industry.
The comprehensive FTA covers goods, services, ROO, sanitary and phytosanitary (SPS), technical barriers to trade (TBT), dispute settlement and trade facilitation. In addition, to accelerate bilateral trade, the deal is expected to generate a million jobs for India in growth sectors such as apparel, plastic, leather and pharmaceutical.
