The Comprehensive Economic Partnership Agreement (CEPA) that was signed between India and United Arab Emirates (UAE) came into effect on 1st May 2022. The agreement was inked on 18th February between Indian Prime Minister Narendra Modi and Crown Prince of Abu Dhabi Sheikh Mohammed Bin Zayed Al-Nahyan during the India-UAE Virtual Summit held in New Delhi.
CEPA will be responsible for establishing a framework for encouraging as well as improving the trade relations between the two countries. As per the press release by the Indian Ministry of Commerce & Industry, CEPA covers almost all 11,908 Indian tariff lines and 7,581 UAE tariff lines. Moreover, India will grant preferential access to the UAE of more than 90% of its tariff lines, including those of export importance.
The deal will cover various areas such as Trade in Services, Trade in Goods, Sanitary and Phytosanitary (SPS) Measures, Telecom, Customs Procedures, Pharmaceutical Products, Dispute Settlement, Movement of Natural Persons, Government Procurement, Rules of Origin, Technical Barriers to Trade (TBT), Digital Trade, Intellectual Property Rights (IPR), Investment, and Cooperation.
It is considered to be the first comprehensive free trade agreement India has made with any nation in the past decade.
The country will also benefit from UAE’s preferential market access of over 97% of its tariff lines, making up for nearly 99% of India’s exports to the UAE. These will include labor-intensive industries such as jewelry, gems, leather, textile products, sporting equipment, wood products, agricultural, plastics, footwear, furniture, automobiles, industrial equipment, and medical devices.
Both nations have also decided upon a separate Annex on Medicines to aid Indian pharmaceuticals in getting access to the market, such as automatic registration and market authorization in 90 days for items fulfilling certain conditions.
The release also stated that UAE has become India’s third-largest trading partner, with their bilateral trade having grown from $180 million annually in the 1970s to $60 billion in the FY 2019-20.