An economic agreement between the United Arab Emirates and India will soon boost bilateral trade.
The UAE-India Comprehensive Economic Partnership Agreement, signed in February, will come into effect May 1. The deal reduces numerous tariffs and duties affecting trade between the two countries. The following are some key highlights from the agreement, per the UAE Ministry of Economy and the Mumbai-based Economics Law Practice:
- elimination or reduction of more than 80% of tariffs on goods exported from the UAE to India
- elimination of the 5% duty on Indian textile, jewelry and leather exports to the UAE, among others
- immediate elimination of duties on 90% of Indian exports to the UAE
- phased elimination of duties on 9% of Indian exports to the UAE, including electronics and chemicals
- establishment of a mechanism for consultations on non-tariff measures that may create barriers to trade
- establishment of a platform for small- and medium-sized businesses in both countries to expand customer bases and collaboration
Various food items, rubber products, toys, soaps and other goods are excluded from the deal.
An e-platform specifying the agreement’s stipulations for businesses launched today, the official Emirates News Agency reported.
Why it matters: India is a major trade partner of the UAE. India was the UAE’s second largest import and export partner in 2019 behind Saudi Arabia and China, respectively. The UAE exported $14.7 billion worth of goods to India in 2019, amounting to a 3.77% share of the market. The UAE imported $26.7 billion worth of goods from India that year, amounting to a 9.27% market share, according to data from The World Bank.
The figures in 2020 were similar. The UAE exported $22.1 billion to India in 2020, led by $6.34 billion in crude petroleum, $4.16 billion in diamonds and $2.57 billion in gold. India exported $18.1 billion to the UAE that year, including $2.9 billion in refined petroleum, $2.33 billion in jewelry and $1.23 billion in broadcasting equipment, according to the data website Observatory of Economic Complexity.
Know more: Emirati entities are looking to increase cooperation with India in other ways as well. Last year, the Dubai-based DP World began developing logistics infrastructure in the disputed territory of Kashmir.
India and the UAE are linked in various ways. There are more than three million Indian citizens living in the Gulf state and the UAE is the top tourist destination for Indian travelers.