Over 90% Export from India to UAE now duty-free

The Comprehensive Economic Partnership Agreement (CEPA), the biggest bilateral trade pact between the two major economies, began auspiciously with the first consignment of $1 million worth of jewellery shipped from India to the United Arab Emirates (UAE) on May 1st. The historic agreement aims to make bilateral trade between both countries more economical and accessible and will especially benefit Indian small and medium enterprises (SMEs). Trade between the two countries is expected to nearly double from $60 billion to $100 billion by 2030 and trade in services will hit $15 billion.

The Comprehensive Economic Partnership Agreement is a complete trade agreement covering trade in goods and services, rules of origin, dispute settlement, digital trade, pharmaceutical products, IPR, and more. Under the CEPA, 90% of exported products and 80% of trade lines exported by India are now duty-free. This includes goods like gems and jewellery, textiles, leather, footwear, and medical devices. It is expected that duty-free access for Indian products will reach 97% of UAE tariff lines (99% of Indian exports by value) within the next 5-10 years.

The UAE is India's third-largest trade partner and second-largest export destination. It is also a major global distribution centre for the Middle East and North Africa, so CEPA will enable further access to warehouses and distribution centres for Indian exporters looking to expand to additional markets. The agreement is also likely to generate over one million additional jobs in India as well as for the large expatriate Indian workforce in the UAE.

India is likely to negotiate similar trade agreements with other countries in the Gulf including Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia in the near future.

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