India and UAE: India may promote strict rules of origin in the negotiations of the UAE Free Trade Agreement

India May promote strict rules of origin in its proposed free trade agreement (Free Trade Agreement) And the United Arab Emirates (UAE) To determine the source of goods and avoid circumvention, because the latter is a transshipment hub.

It will also call on the UAE to require government procurement, small and medium-sized enterprises (SMEs) and e-commerce to be included in the proposed free trade agreement, as this may affect the country’s position on these issues in the Free Trade Agreement. WTO (In there).

Although India opposes the WTO’s plurilaterals on e-commerce and SMEs, it is not a signatory to the government procurement agreement.

The two sides launched the first round of free trade agreement negotiations on Thursday-called the Comprehensive Economic Partnership Agreement (CEPA)-to discuss tariff concessions for goods, services, rules of origin and non-tariff measures. “Text negotiations and technical meetings for some chapters have already started, but issues such as investment will be discussed later,” an official said.

Investment-related issues may be discussed next week, when large sovereign wealth funds from the UAE and other companies will participate.

To ensure that tariffs will not be evaded by changing trade routes, India may push the country of origin to force an increase of 35% in added value to request tax exemption under the agreement. This is crucial because the UAE is a transshipment center and it is difficult to implement rules of origin standards.