The India-UAE Comprehensive Economic Partnership Agreement (CEPA) was signed a year ago to strengthen trade ties between the two countries. This essay reviews the first year of CEPA and highlights its significance.
About India-UAE CEPA:
The CEPA aims to increase the total value of bilateral trade in goods to over US$100 billion and trade in services to over US$ 15 billion within five years. The agreement provides preferential market access to India on over 97 percent of its tariff lines, benefiting labor-intensive sectors such as gems and jewelry, textiles, leather, footwear, sports goods, plastics, furniture, agricultural and wood products, engineering products, pharmaceuticals, medical devices, and automobiles. In terms of trade in services, Indian service providers have enhanced access to around 111 sub-sectors from the 11 broad service sectors.
Review of the First Year of India-UAE CEPA:
Trade Success: According to reports, CEPA is the fastest executed bilateral agreement, resulting in an increase in imports and exports between India and UAE. The agreement boosted trade, benefiting the domestic market, and labor-intensive sectors saw significant growth. India’s global export rose by 5.3 percent, and exports to UAE increased by 11.8 percent. Imports also increased from the UAE by 18.8 percent. The export of commodities like jewelry, cars, and beauty products rose, and aircraft, spacecraft, and exports of parts increased as UAE is a transit hub between Asia, Europe, and the Americas.
Certificate of Origin: CEPA ranked second in issuing Certificate of Origin in the last 11 months. The certificate confirms the ‘nationality’ of a product and serves as a declaration to satisfy customs or trade requirements.
Below-Expectation Export Commodities: The export of commodities such as iron, steel, and apparel did not grow as expected.
India-UAE Relations:
Evolution of Relations: India and UAE established diplomatic relations in 1972. UAE opened its Embassy in Delhi in 1972, and India opened its Embassy in Abu Dhabi in 1973. In 2015, the traditionally strong bilateral relations between the two countries received an impetus with PM Modi’s visit to UAE on 16-17 August 2015, marking the beginning of a new strategic partnership. In August 2019, Modi received the UAE’s highest award, ‘Order of Zayed.’
Trade: Bilateral trade in FY 2021-22 was about US$ 72 billion. UAE is India’s third-largest trade partner and second-largest export destination. UAE’s FDI in India has increased over the past few years and currently stands at over $12 billion.
Defence and Security Cooperation: Bilateral Defence Interaction between India and UAE has been steadily growing, with ships of the Navies of both countries regularly making port calls enhancing bilateral defence co-operation. India and UAE signed a comprehensive strategic partnership in 2017, and hold annual defence dialogues. UAE is a key part of the Indian Ocean Region dialogue. Both sides take part in military exercises with each other, and there have been several Military chiefs visits.
Technology Partnerships: India and UAE have signed digital innovation and technology partnerships, and plans for ISRO and UAESA to cooperate on missions like the Red Moon mission. The Emirates has offered “golden visa” residency permits for doctors, engineers, PhD scholars, and specialists in high-end technology fields such as artificial intelligence (AI), Big Data, virology, and epidemiology.
Cultural Relations:The UAE has demonstrated its appreciation for Indian culture on numerous occasions. In April 2019, India was invited to participate as the Guest of Honour Country at the Abu Dhabi International Book Fair, highlighting the importance placed on Indian culture. Additionally, Indian cinema, TV, and radio channels are widely available in the UAE, with significant viewership. Popular Hindi, Malayalam, and Tamil films are regularly screened in major theatres and cinema halls. The Emirati community also actively participates in annual International Day of Yoga events, and several yoga and meditation centers have been established in the UAE, with great success.
Important Points:
- 🤝 The India-UAE Comprehensive Economic Partnership Agreement (CEPA) was signed a year ago to strengthen trade ties between the two countries
- 📈 The CEPA aims to increase the total value of bilateral trade in goods to over US$100 billion and trade in services to over US$ 15 billion within five years
- 🚢 CEPA boosted trade, benefiting the domestic market, and labor-intensive sectors saw significant growth
- 💼 The agreement provides preferential market access to India on over 97 percent of its tariff lines, benefiting labor-intensive sectors such as gems and jewelry, textiles, leather, footwear, sports goods, plastics, furniture, agricultural and wood products, engineering products, pharmaceuticals, medical devices, and automobiles
- 🧾 CEPA ranked second in issuing Certificate of Origin in the last 11 months, confirming the ‘nationality’ of a product and serving as a declaration to satisfy customs or trade requirements
- 👎 Export of commodities such as iron, steel, and apparel did not grow as expected
- 🇮🇳🇦🇪 India and UAE established diplomatic relations in 1972 and have developed a strong strategic partnership over the years
- 💰 Bilateral trade in FY 2021-22 was about US$ 72 billion, and UAE is India’s third-largest trade partner and second-largest export destination
- 🛡️ Bilateral Defence Interaction between India and UAE has been steadily growing, and both countries hold annual defence dialogues
- 🌐 India and UAE have signed digital innovation and technology partnerships, and there are plans for ISRO and UAESA to cooperate on missions
Why In News
The India-UAE Comprehensive Economic Partnership Agreement (CEPA), which came into force on May 1st, 2022, has completed its first year, and it has proved to be a significant milestone in strengthening trade ties between India and UAE.
MCQs about India-UAE CEPA
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What is the goal of India-UAE Comprehensive Economic Partnership Agreement (CEPA)?
A. To increase bilateral trade in goods and services between India and UAE
B. To establish military cooperation between India and UAE
C. To provide preferential market access to UAE on all tariff lines
D. To increase imports from UAE by 50% within five years
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Which of the following sectors benefited from India-UAE CEPA?
A. Gems and jewelry, textiles, and leather
B. IT and software
C. Banking and finance
D. Agriculture and fishing
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Which of the following fields are eligible for UAE’s “golden visa” residency permits?
A. Construction and infrastructure
B. Hospitality and tourism
C. Medical and technology
D. Energy and mining
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