The Ministry of External Affairs issued a statement on Wednesday which announced the comprehensive partnership of India and the UAE over the Free Trade Agreement (FTA) which is to be signed on Friday, February 18. PM Narendra Modi and Crown Prince of Abu Dhabi Sheikh Mohamed bin Zayed al Nahyan are going to hold a virtual summit on Friday, the statement said.
“Both Leaders are expected to lay out their vision of the historic and friendly relations between the two countries, at a time when India is celebrating 75 years of its Independence as Azadi Ka Amrit Mahotsav and UAE is celebrating the 50th anniversary of its foundation,” the MEA statement said. The two leaders will also discuss bilateral cooperation and exchange views on regional and international issues of mutual interest during the virtual summit.
The MEA has confirmed the news of FTA between India and the UAE which was being speculated for a few days already. It is learnt that the two leaders will be discussing issues on bilateral cooperation and will exchange views on regional and international issues of mutual interest. As a major initiative to boost bilateral trade, The Comprehensive Economic Partnership Agreement (CEPA) will be signed between the two countries on the same day.
Reportedly, the FTA will be signed by Indian commerce and industry minister Piyush Goyal and UAE economy minister Abdulla bin Touq Al Marri. Under such free trade agreements, the participating countries reduce or eliminate customs duties on the maximum number of goods traded between them.
Earlier in January this year, Australian Minister for Trade Dan Tehan was in New Delhi to discuss long-pending issues with mutual negotiations related to the bilateral trade agreement between the two countries. Indian Minister for Commerce and Industry Minister Piyush Goyal had assured that the CEPA between India and Australia would be signed before the end of this year.
What is the FTA?
The Free Trade Agreement officially touted as the ‘Comprehensive Economic Partnership Agreement’ (CEPA) is an agreement signed between two countries intending to liberalize bilateral trade by doing away with many import and export duties on prominent goods. The two countries which sign the pact, deal on reducing customs duties, tariffs, cutting the red tape to attract foreign direct investment, and sometimes share expertise in manufacturing goods and services.
So Far, India has shared FTAs with neighbouring countries like Pakistan, Sri Lanka and Nepal. Currently, India is holding dialogues with Israel, Australia and the UK and is moving forward to hold FTAs with them. Here, the United Arab Emirates stands out as one of the first countries on the list with whom India is about to sign FTA recently.
Trade between India and the UAE
In the statement issued the MEA has said that UAE is India’s third-largest trade partner and bilateral trade and investment ties are expected to see significant enhancements after the agreement. In 2020-21, Bilateral trade between India and the UAE stood at $43.3 billion. While exports from UAE happened close to $16.7 billion, India’s imports amounted to $26.7 billion in 2020-21.
India’s top imports from the UAE include petroleum and petroleum products, precious metals, gems and jewellery while it also exports majorly in precious metals and jewellery from India. Apart from this, India also exports food items such as cereals, sugar, fruits and vegetables, varieties of tea, meat, seafood, textiles and engineering and machinery products. Experts have stated that with the signing of the FTA, the gem and jewellery industry is likely to get a major boost.