India and the UAE will sign a trade agreement within 6 months, and the first round of negotiations will be held this week

India and the United Arab Emirates announced the start of mutually beneficial negotiations on Wednesday Comprehensive Economic Partnership Agreement (CEPA) The goal is to conclude negotiations at the end of this year and sign a formal agreement in March next year.

The first round of early harvest negotiations under CEPA will be held from September 23 to 24.

The agreement is expected to increase bilateral trade in goods to US$100 billion and trade in services to US$15 billion within five years of signing the agreement, but this forecast is currently being reassessed.

“The two parties have set a very ambitious and aggressive timetable. The goal is to complete the negotiations by December 2021. We hope to sign a formal agreement in early 2022 after completing the internal legal procedures… We are negotiating a A radical bilateral agreement,” the Minister of Commerce and Industry Pius Goyal Said.

The UAE is currently India’s third largest trading partner, with a bilateral trade volume of 59 billion U.S. dollars in FY20. It is also India’s second largest export destination after the United States, with exports of 29 billion U.S. dollars in fiscal year 2020. India is the UAE’s second largest trading partner in 2019, with a bilateral non-oil trade volume of 41 billion U.S. dollars.

The Minister of Trade of India stated that the two sides will cooperate on trade remedial measures.

“We will determine the focus in the discussion of the free trade agreement, as well as the early harvest of the free trade agreement that will be negotiated from tomorrow,” Goyal said.

The UAE Minister of State for Foreign Trade, Thani bin Ahmed Al Zeyoudi, who is visiting India, said that the investment protection agreement was discussed during the meeting, and another meeting is expected to be held within a week, when large sovereign wealth funds and other businesses from the UAE will participate.

Mutual recognition agreements for testing laboratories, customs facilitation, data exchange and investment agreements are other benefits that India has focused on through the agreement.

“This will be a useful agreement, especially for India’s asset monetization plan, because investments from the UAE will be given priority, and they will gain comfort and confidence,” Goyal said.



Although India has been negotiating trade agreements with the United Kingdom, Australia and the European Union, Goyal said that the UAE’s response was the most positive and the response was the most positive.

“The tight timetable is beneficial and provides mutual benefits for both parties… This partnership will become the pride of the owners and the envy of the neighbors,” Goyal said.

Important area

Goyal said that as part of the early harvest, the two parties have decided on projects that have obvious competitive and comparative advantages.

“They will be regarded as unresolved results, and their consent will be obtained in advance. With the framework of the free trade agreement, we will have an early harvest section, in which projects of direct interest will be put into use faster,” Goyal said, and Added that the items of interest to India include textiles, gems and jewellery, footwear, leather products and handicrafts.

In addition to tariff preferences, Indian industry also proposes to recognize its products in the UAE.

Goyal said that the UAE’s strategic location, trade with Africa and its various trade agreements can help India become part of the supply chain, especially in the fields of handlooms, handicrafts and pharmaceuticals.

“We want to use our strengths-medical equipment, advanced industrial sectors, pharmaceuticals, financial technology, ICT, space,” Al Zeyoudi said.

Among them, petrochemical equipment is an area of ​​interest to the UAE.

India’s main exports to the UAE include petroleum products, precious metals, stones, gems and jewelry, minerals, grains, sugar, foods such as fruits and vegetables, tea, meat and seafood, textiles, engineering and machinery products, and chemicals. The main products that India imports from the UAE include petroleum and petroleum products, precious metals, gems, gems and jewellery, minerals, chemicals, and wood and wood products. India imported 10.9 billion U.S. dollars of crude oil from the UAE in 2019-2020.

The UAE is India’s eighth largest investor, with US$11 billion invested between April 2000 and March 2021, while Indian companies’ investment in the UAE is estimated to exceed US$85 billion.