According to an official, the full free trade deal between India and the UAE will benefit roughly USD 26 billion worth of local products such as diamonds and jewelry, which are now subject to a 5% import charge by the Gulf nation. Textiles, leather, footwear, sports goods, plastics, furniture, agricultural and wood products, engineering, pharmaceuticals and medical devices, and autos are all labor-intensive industries that would benefit greatly from the agreement.
Computer-related services, audio-visual, education, health, tourism, travel, nursing, engineering, and accountancy are among the services sector categories that will benefit significantly from the agreement, according to the official.
On February 18, India and the United Arab Emirates inked a comprehensive economic cooperation agreement (CEPA) to increase bilateral commerce in products to USD 100 billion over the next five years and create thousands of employment.
“While the UAE is already India’s second-largest export destination, with over USD 29 billion in shipments in 2019-20,” the official continued, “the CEPA with the UAE is expected to benefit roughly USD 26 billion worth of Indian products that are subject to the UAE’s 5% import fee.”
According to predictions, simple gold and gold-studded jewelry exports will reach USD 10 billion in 2023, and India’s tariff concessions to the UAE on products like gold will lower input import costs. Over the next five years, textile exports are expected to expand by USD 2 billion.
The UAE is giving overall duty elimination on over 97 percent of its tariff lines (or items), equating to 99 percent of India’s exports in value terms, as part of the agreement.
“This agreement includes a revolutionary feature: a permanent safeguard mechanism that has been agreed upon and can be used in the event of a rapid increase in imports. This is the first time India has signed a contract that enforces Country of Origin, preventing products from other countries from being bypassed through the FTA route “The official was added.
Furthermore, to protect the home sector, there is a separate exclusion list for certain products. The goods on the list would be excluded from the accord. Tariff Rate Quotas (TRQs) offered by India to the UAE on several commodities of mutual interest will only be revisited after ten years.
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