According to a senior government official, thanks to the free trade agreement between the two nations, India’s exports to the UAE are predicted to increase by approximately 60% to $50 billion by 2026–2027 from $31.3 billion at present.
Sunil Barthwal, the secretary of commerce, said on Monday that since the May 1 implementation of the trade agreement, trade between India and the UAE has increased dramatically.
“We anticipate being able to export $50 billion worth of goods by 2026–2027. I believe that we should be able to export $50 billion in the five years after the CEPA. According to the responses we are getting, I have no doubt that we will succeed,” Barthwal told the media present.
According to him, a significant amount of commerce is conducted under the trade agreement’s preferential channel.
The secretary said, “We would like traders of the two countries to benefit from the CEPA.”
The Comprehensive Economic Partnership Agreement (CEPA) between India and the UAE, which was signed on February 18, 2022, became effective on May 1 of the previous year.
Due to large incoming oil shipments, India’s exports to the UAE in 2022–23 increased by 11.8% to $31.3 billion, while imports surged by 18.8% to $53.2 billion.
Domestic exporters in a number of industries, including textiles, agriculture, dried fruits, stones, and jewellery, are granted duty-free access to the UAE market under the free trade agreement.
The number of preferred certificates of origin (CoO) issued has surged, from 415 in May 2022 to 8,440 in March.
To claim tariff reductions under free-trade agreements, a trader must provide a “certificate of origin” at the landing port of the importing nation. To demonstrate the provenance of their products, they must provide this certificate.
A total of 54,142 CoOs were issued between May 22 and March 23.
Mineral fuels, electrical apparatus and equipment, gems and jewellery, vehicles, essential oils, coffee, tea, spices, and chemicals were the primary export industries that had brisk expansion in 2022–2023.
Automobile exports surged by 42% to $715.58 million in 2022–2023; electrical machinery exports jumped by 32% to $3.65 billion. In the most recent fiscal year, exports of gems and jewellery increased by 17% to $5.8 billion.
However, exports of iron and steel as well as clothing saw a decline.
In terms of imports, oil imports increased by 36% to $27.7 billion in 2022–2023. Similar to this, imports of aircraft, spacecraft, and their components increased significantly, from about $39 million in 2021–2022 to $1.9 billion in 2022–2023.
Further, Barthwal stated that a joint trade committee oversees the execution of this trade agreement, and if a problem arises, both parties will work together to find a solution.
He continued by saying that this group had discussed the topic of gold.
The CEPA agreement became operative on May 1 of last year. According to the deal, India is permitted to import 110 tonnes from the UAE at a reduced import tariff of 1%.
The deadline to submit an application for the Tariff Rate Quota (TRQ) year 2023–24 was February 28, 2023, according to the Directorate General of Foreign Trade (DGFT).
Less use of the TRQ was one of the factors contributing to the decline in UAE gold imports, but “we have opened it for traders” now as well.
Manufacturers and merchants of yellow metal from the UAE may now import up to 140 MT of gold at a reduced price under the terms of the India-UAE Comprehensive Economic Partnership Agreement (CEPA).
The trade deal, according to Aqeel Panaruna, a former head of the Council for Leather Exports, is the “most effective which we have seen in recent times.”