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A free trade agreement between India and the United Arab Emirates came into effect on Sunday, allowing duty-free access to the UAE market for domestic exporters in various sectors including textiles, agriculture, dried fruits, gems and jewellery. As a symbolic gesture to implement the agreement, Commerce Minister BVR Subrahmanyam issued certificates of origin to three of its exporters in the gem and jewellery industry. These shipments to Dubai are tax-free under the agreement officially known as the Comprehensive Economic Partnership Agreement (CEPA).
The trade deal will help him increase two-way trade from the current $60 billion to $100 billion within five years. “$100 billion is just the beginning, we will have $200 billion and we will reach $500 billion in the next few years,” the minister said. He added, “99% of our exports will be duty-free in the UAE.” India, which accounts for a sizable portion of its exports to the UAE, is expected to benefit significantly from the preferential tariffs the agreement provides on Indian products.
The Central Directorate of Indirect Taxes and Customs (CBIC) and the Directorate General of Foreign Trade (DGFT) have issued a circular on the implementation of the agreement from 1 May. “Today, the CEPA between India and the UAE comes into effect. Today, we are shipping the first cargo from India to the UAE, which will benefit from this agreement,” Subrahmanyam said here. He noted that the United Arab Emirates is India’s second or third largest trading partner and the country is a gateway to the Middle East, North Africa, Central Asia and Sub-Saharan Africa.
Overall, India will benefit from the UAE’s preferential market access for more than 97% of its customs goods (or commodities). This accounts for 99% of the value of India’s exports to the UAE. Sporting goods, plastics, furniture and technical products. He stressed that Indian products need to be competitive in the international market, and domestic production capacity needs to be built and expanded.
He also said that India has been very quick in negotiating trade deals with complementary economies such as the UK, Canada and the EU. Exports of goods and services account for about 22-23% of India’s GDP, Subrahmanyam said. “Our vision is for 25-30% of India’s GDP to come from exports,” he added. The Commerce Ministry also strengthened its outlook, looking to the future and facing tomorrow’s challenges, with a focus on facilitating trade. “We are rearranging sectors. They will change over the next few months and we will build a huge trade facilitation sector.
News summary:
- India-UAE trade agreement enters into force
- View all the latest news and articles business news renew.
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