India-UAE CEPA: A Powerful Trade Partnership Shaping the Future
For several decades, India and the UAE share strong bonds, while the signing of CEPA in 2022 took their relationship to another higher level. This landmark agreement created a conducive environment not only to enhance the trade and economic interaction between the two countries, but also to give rise to exciting new opportunities for businesses on either side.
Major Trade Growth Since CEPA:
- After just one year into CEPA, India-UAE trade reached new highs:
- From April 2022 to March 2023: Total bilateral trade went up to $84.5 billion, up from $72.9 billion in the previous year (an increase of 16%).
- As an 11.8% increase, India’s exports to the UAE rose from $28 billion to $31.3 billion, a rate significantly above India’s overall global export growth of just 5.3%.
- Exports from the UAE to India reached $53.2 billion, an increase of 18.8%, with non-oil imports experiencing a growth of 4.1%.
- The trend remains that, in FY 2023-24, bilateral trade was nearly doubled with almost $83.7 billion; non-oil trade alone reached $65 billion in 2024 with a 20.5% increase considering the last year.
Sectors that Benefited the Most:
Several Indian industries benefited from CEPA to witness huge growth. These include:
- Petroleum products
- Gems and jewellery
- Electrical machinery
- Pharmaceuticals and chemicals
- Agricultural goods, including rice, coffee, and spices
- Automotive and essential oils
Tariff Reductions and Market Access:
The most salient benefit that CEPA confers is cutting sharply duties between India and the UAE. It has brought import duties down to 97.4% on 97.4% of tariff lines, nearly 99% of which include goods exported from India. On the other hand, India has taken down import duties on over 80% of tariff lines covering about 90% of goods coming in from the UAE.
Boost to Services and Digital Trade:
Not just limited to goods, CEPA is also a revolution for the services sector. India has thrown open 100 service sub-sectors to businesses from the UAE. In return, the UAE has granted Indian companies access to 111 sub-sectors. Examples include healthcare, education, information technology, and finance- three areas that drive cross-border collaboration in today’s growing digital economy.
Easy and Transparent Trade:
Trade becomes easier and less cumbersome under CEPA with reduced technical barriers and help with international standards. Greater transparency in regulation brought with it the protection of UAE-origin products from nuisance anti-dumping investigations upon re-export from India. Additionally, UAE companies are provided a 10% price preference for Indian government procurement.
Increasing CEPA Usage:
As business activities are in full swing, India only issued 415 Preferential Certificates of Origin (PCOs) in May 2022. However, this number soared to 8,440 by March 2023. In total, over 54,000 were issued within just 11 months. This shows that many businesses are realizing the benefits of CEPA and are using it to enter each other’s markets.
India-UAE CEPA is a strategic partnership to create jobs, investments, exports, and growth. Indeed, two nations set a benchmark for how modern economic partnerships are supposed to work in the backdrop of ever-changing global scenarios while cooperating along the CEPA.
