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India’s non-oil exports United Arab Emirates (UAE) grew just 4.5% in the May-July period (the first three months since a trade agreement with the West Asian country was signed), even as the country’s total outbound freight volumes increased by around 16% to $8.09 billion, Ministry of Commerce and Industry data show.
In contrast, India’s overall non-oil exports rose 8% in the May-July period, while overall exports rose 15.1% over the same period.
Unless exports of gems and jewellery products, electronics such as smartphones and certain petroleum products increase United Arab Emirates It has yet to see any major gains from the free trade agreement (FTA) that came into effect in May.
On the other hand, India’s trade deficit United Arab Emirates Compared to May-July 2021, it more than tripled to $6.23 billion, largely due to a surge in oil imports as global crude prices remain high due to the Russia-Ukraine conflict.
However, government officials and trade experts have pointed out that it usually takes at least six months to measure the initial benefits of a free trade agreement, and it may be too early to tell how much the trade pact will benefit India. Currently, exporters are hosting buyer-seller meetings as well as various outreach programs to improve the chances that even exporters from small towns can take advantage of the trade deal.
“Exports of gold jewellery also benefit from the free trade agreement. We have told the Export Promotion Council to let exporters even in Tier 2 and Tier 3 cities know about India –United Arab Emirates trade agreement. We expect exports of products from labor-intensive industries such as leather and footwear to benefit from the trade deal,” a senior government official told The Business Standard.
Former WTO exporter ambassador Jayant Dasgupta also needs time to assess whether they can export new products to benefit from trade preferences. “For exports of tariff items eligible for reduced FTA tariffs, only about 20-30% of our exports use the FTA route due to the time and cost involved in obtaining a certificate of origin. For smaller exporters Especially so,” Dasgupta said.
Vipul Shah, chairman of the Gem and Jewellery Export Promotion Council, said that since the India-UAE Comprehensive Economic Partnership Agreement (CEPA) came into force on May 1, exports of pure gold jewellery to the UAE have surged and have been on a downward trend in the past two years. According to provisional data, total exports of pure gold jewellery increased by 21.85% year-on-year to US$1.69 billion. To be sure, 80% of India’s pure gold jewellery is exported to the UAE.
“GJEPC also hosted many webinars and live events to educate exporters about Indo-UAE CEPA and how to benefit from it. As a result, exports to the UAE increased by 13.61% to $2.34 million between April and August, “Shah said.
Narendra Goenka, chairman of the Apparel Export Promotion Council (AEPC), said exporters have now started receiving more inquiries from the UAE and it will take around five or six months to see a real difference. “We expect growth of around 15-20% for the next fiscal year,” Goenka said.
In value terms, the trade deal is expected to benefit nearly 90 percent of India’s exports. The UAE provides comprehensive tariff relief on over 97% of tariff items, equivalent to 99% of India’s export value. From May 1, Indian exporters have immediate zero-duty market access in labor-intensive industries such as leather, footwear, gems and jewellery, and furniture.
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