India- UAE Virtual Summit

In News

• Recently, a virtual summit was held Between India and the United Arab Emirates (UAE).

Major Highlights of Summit

• India-UAE CEPA trade deal:
  • The new strategic economic agreement will increase bilateral trade in goods to $100 billion in five years (2022-27) of the signed agreement and increase trade in services to $15 billion.
  • The agreement covers areas including goods, services, rules of origin, Customs procedures, government procurement, intellectual property rights, and e-commerce.
  • CEPA is expected to create new jobs, raise living standards, and provide wider social and economic opportunities in both nations.
• Investments:
  • The UAE is also the eighth-largest investor in India, having invested $11 billion while investment by Indian companies in the UAE is estimated to be over $85 billion.
• India’s major exports to UAE:
  • India’s major exports to the UAE include petroleum products, precious metals, stones, gems and jewelry, minerals, food items such as cereals, sugar, fruits and vegetables, tea, meat, and seafood, textiles, engineering and machinery products, and chemicals.
• India’s top imports from the UAE:
  • It includes petroleum and petroleum products, precious metals, stones, gems and jewelry, minerals, chemicals and wood and wood products.
• Memorandum of Understanding (MoU):
  • It was signed between the International Financial Services Centers Authority (IFSCA), GIFT City and the Abu Dhabi Global Market Financial Services Regulatory Authority (FSRA).
  • Another MoU covered the building of food corridors.
• Free Trade Agreement (FTA):
  • It is set to reduce tariffs for 80 per cent of goods and give zero duty access to 90 per cent of India’s exports to the UAE.
  • Indian exports are expected to benefit from the “zero duty” from day one of the entry into force of the agreement.
• Facilitate market access and regulatory approval:
  • The UAE has also agreed to facilitate market access and regulatory approval within 90 days for Indian pharmaceutical products and medical products that have been approved in developed jurisdictions such as the US, the UK, the EU, Canada and Australia.
• Fight extremism and terrorism:
  • A Joint commitment to fight extremism and terrorism, enhancing maritime cooperation, promote e-payment solutions, set up an IIT in UAE, a joint Hydrogen Task Force has been set up.
• Defence and security:
  • Both sides agreed to enhance maritime cooperation contributing to maintenance of peace and security in the region.
• Energy partnership:
  • They agreed to promote collaboration opportunities to support India’s energy requirements, including new energies, and ensure the provision of affordable and secure energy supplies to India’s growing economy.
  • They also expressed mutual support in energy transition and focused work on a low-carbon future.
• Climate action and renewable:
  • Both sides agreed to support each other’s clean energy missions and establish a joint Hydrogen Task Force to help scale up technologies, with special focus on production of Green Hydrogen.
• Emerging technologies:
  • Both sides agreed to expand cooperation on critical technologies and mutually promote e-businesses and e-payment solutions and promote start-ups from both countries.
• Education:
  • On education cooperation, they agreed to establish an Indian Institute of Technology in the UAE.
• Health cooperation:
  • Both sides decided to collaborate in research, production and development of reliable supply chains for vaccines and enhance investments by UAE entities in the health infrastructure in India as well as collaborate in providing healthcare in underprivileged nations.
• Food security
  • They acknowledged the need to enhance the resilience and reliability of food supply chains.
  • They also decided to expand cooperation through enhanced bilateral food and agriculture trade and, promote and strengthen the infrastructure and dedicated logistic services connecting farms to ports to final destinations in the UAE.

What is CEPA?

• It is a kind of free trade pact that covers negotiation on the trade in services and investment, and other areas of economic partnership.
• India has signed CEPAs with South Korea and Japan.

Significance of the deal

• Enhanced market access: The agreement will provide significant benefits to Indian and UAE businesses, including enhanced market access and reduced tariffs.
• The CEPA will boost bilateral trade from the current $60 billion to $100 billion in the next 5 years.
• India welcomed investment from the Gulf country into Jammu and Kashmir that would open new routes for regional trade and connectivity and advance the collective interests of India, Israel, the UAE and the United States.
• The deepening of the relationship with the UAE would also help Indian exporters gain access to other West Asian countries, Africa and some parts of Europe.
• Digital trade: Early harvest agreement would likely include a chapter on digital trade which would be aimed at enhancing cooperation between the two countries on digital trade in the future.
  • Digital trade is likely to include frameworks on paperless trading, digital payments and online consumer protection, as well as address issues such as intellectual property rights in digital trade, and challenges to small and medium enterprises.
• The UAE hopes to get enhanced market access in India for its petrochemicals, metals and dates.
• Indian goods will flow to the other GCC countries as the UAE has no customs barriers.
• Energy ties: UAE is India’s third largest supplier of crude oil and second largest supplier of LPG and LNG. Renewable energy is the next stop for bilateral energy ties.
• It may also give a boost to India’s jewellery exports.  

Source: TH