India and UAE jointly signed FTA- The free trade agreement that aims to reduce import duties on the majority of Indian exports to the country. In this agreement, it is intended to reduce tariffs for 80 percent of goods give zero duty access to 90 percent of India’s exports to the UAE. The deal is expected to boost bilateral trade to $100 billion within 5 years. The deal aims to boost labor-intensive sectors in India also.
However, the agreement takes time to come into effect, and the expected date is after 60 days. India PM Modi signed the first major trade deal called The Comprehensive Economic Partnership Agreement after he comes into power in 2014. This deal focuses on economies, provides opportunities for business in both countries. The deal was signed by Commerce and Industry Minister. The deal this year will further open up investment opportunities for both sides, UAE minister of economy Abdulla bin Touq Al-Marri told media.
UAE is India’s third-largest trade partner globally, after the United States and China. Bilateral trade between both nations stood at $43.3 billion as of 2020-21 and is spread across thousands of traded items. In 2019-20, the pre-pandemic year, trade between the two countries was estimated at $59 billion. The UAE is also home to 35 lakh Indian-origin persons.
The document signed by India and UAE is an 880-page one that covers topics such as free trade, digital economy, government procurement, strategic areas, Piyush Goyal said. As far as India is concerned, the agreement will benefit exports of gems & jewelry, textiles, leather, footwear, sportswear, plastics, furniture, Agri goods, pharma, medical equipment, automobiles, and engineering goods, said the minister. The tariff elimination covers key sectors such as aluminum, copper, steel, polyethylene, polypropylene, and other goods and services from different sectors.
Through a permanent safeguard mechanism, both the countries that took part in the deal will be protected from any sudden surges in the volume of any product. Apart from this, the UAE has also planned to conduct a deal with 8 other nations. Anyway, the deal with India has economic and strategic importance for the Emirates.