India-UAE CEPA deal will drive non-oil trade to $100 bn in 5 years: Al Marri
India-UAE trade grew by 68.4% in 2021-22 to $72.8 billion. The UAE is also home to some 3.5 million Indians, one of the biggest sources of remittances
The free trade agreement between India and the United Arab Emirates, expected to drive non-oil trade to $100 billion in five years, is a flexible deal that allows the inclusion of new elements in areas such as digital, UAE economy minister Abdulla Bin Touq Al Marri has said.
The Comprehensive Economic Partnership Agreement (CEPA), which was signed by the two countries in February and became effective in May, also opens the door for tripartite cooperation with Indian businesses using the UAE as a base to enter the Israeli market, Al Marri said in an interview.
Describing the CEPA as the first part of the UAE’s “bold new foreign trade policy designed to reengineer our economy for the next 50 years”, he said the agreement is expected to add $9 billion to the UAE’s national GDP by 2030, and to “fuel the growth of UAE-India non-oil trade to exceed $100 billion from the current $40 billion within five years of the signing of the agreement”.
The forward-looking agreement also has scope for the inclusion of new elements. “This is a flexible deal. For instance, it creates a digital framework that enables both countries to leverage emerging and future technologies. In terms of digital trade, there are still elements that are being debated at a global level. Some of those elements will be incorporated in this CEPA as we go forward,” Al Marri said.
Noting that the CEPA includes an investment chapter to facilitate and monitor investment flows between two countries, he said: “This deal brings forward the timeline for updating the existing Bilateral Investment Treaties between both countries.”
Al Marri added, “In the future, we can frame it in the shape that will include the latest changes to – for example – digital trade and environmental legislation. This allows us to update and upgrade the deal and resolve future issues.”
Asked if the India-UAE CEPA and the Emirates’ landmark free trade deal with Israel increases the potential scope for tripartite cooperation, Al Marri replied, “No doubt, this can pave the way for tripartite cooperation for trade and businesses coming into the UAE from India and then going to Israel and other CEPA markets with added value.”
While the UAE and India worked together at the peak of the Covid-19 pandemic to minimise supply chain disruptions through exchange of medical supplies and professionals, Al Marri said the CEPA will “ensure access to global markets through safe, secure and reliable supply chains as well as enhance the efficiency and sustainability of those supply chains, both to accelerate the free flow of trade but also to secure a stronger, more resilient global economic future”.
Al Marri also noted that India is the UAE’s second largest trading partner while the UAE is India’s third biggest trade partner. “In 2021 alone, we exchanged nearly $45 billion worth of goods, excluding oil. India is our number one trading partner for non-oil exports, accounting for 14% of the total exports globally,” he said.
India-UAE trade grew by 68.4% in 2021-22 to $72.8 billion. The UAE is also home to some 3.5 million Indians, one of the biggest sources of remittances.
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