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India and the United Arab Emirates (UAE) are set to start talks to address exporters’ concerns over the exhaustive details of manufacturing and sourcing required by customs in both countries to implement rules of origin requirements agreed under the agreement free trade Last year the agreement, the two know the development said.
India and the United Arab Emirates (UAE) are set to start talks to address exporters’ concerns over the exhaustive details of manufacturing and sourcing required by customs in both countries to implement rules of origin requirements agreed under the agreement free trade Last year the agreement, the two know the development said.
The two countries also decided to boost non-oil trade amid depressed global commodity prices following the first review of the India-UAE Comprehensive Economic Partnership Agreement (CEPA) last week.
The two countries also decided to boost non-oil trade amid depressed global commodity prices following the first review of the India-UAE Comprehensive Economic Partnership Agreement (CEPA) last week.
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“Rules of origin requirements are putting pressure on Indian exporters. The challenge is that tariffs in the UAE are not that high, so exporters are weighing whether it is worth bearing the compliance burden. Exporters have raised these concerns with the Ministry of Commerce,” said the two. said one of the people, who asked not to be named.
Rules of origin requirements are used to determine the country of origin of goods. They determine the eligibility of goods for preferential treatment under free trade agreements, such as tariff relief.
However, the source explained that “circumvention of rules of origin” is a greater concern for India because the UAE is a transnational hub. As India insists on strict rules of origin requirements, the UAE is doing the same. “They ask for a very detailed manufacturing process, which exporters are reluctant to disclose. So, they are less willing to share this intellectual property information because if I detail the entire flow chart of my manufacturing, I am taking a risk,” added People .
The issue was discussed at the India-UAE joint committee meeting on June 12 and referred to the rules of origin subcommittee, the second person said. “The subcommittee will make recommendations to the joint committee by November,” the second added.
The India-UAE CEPA, which came into effect on May 1 last year, removed Indian duties on 90% of UAE exports, covering sectors such as gems and jewellery, textiles, leather and engineered products.Gemstones and jewellery, automobiles, grain, and machinery and mechanical appliances have always been largest increase by value.
“The direct exporter, if he is an aggregator, may not know where it is coming from. So there is a suggestion that the manufacturer requirement be made optional. So it will be reviewed by the committee. Some merchant exporters are reluctant to provide it out of fear name of their manufacturer because competitors can source from the same manufacturer. These issues will be resolved by the committee,” the second person added.
Issuing a country of origin certificate to an exporter confirms that the goods meet certain criteria to qualify as origin in a particular country. While country of origin may be reflected in actual exports with a lag, it can serve as a reliable indicator of the use and compliance of an agreement.
Inquiries sent to a Commerce Ministry spokesman and the UAE embassy in India remained unanswered.
The Ministry of Commerce and Industry expects India’s exports to the UAE to rise to $50 billion by FY27 from $31.8 billion in FY23.
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