Minister Piyush Goyal says Cepa is expected to create 1 million jobs in India – News

“Together with great partners like the UAE, we are moving forward to forge multiple partnerships that cover the entire spectrum of our bilateral relationship”

Piyush Goyal, Minister of Commerce and Industry, Consumer Affairs and Food and Public Distribution and Textiles of India.

It’s been a year since the Comprehensive Economic Partnership Agreement (Cepa) between the UAE and India came into force, and it’s time for some stocktaking. India’s Minister of Commerce and Industry, Consumer Affairs and Food and Public Distribution and Textiles, Piyush Goyal, spoke to Khaleej Times about Cepa’s overall impact on the UAE-India business and its future direction. He said the agreement, which came into force on May 1, 2022, began to realize the shared vision of the two leaders.

India’s exports to the UAE hit a record high of $31.2 billion in 2022/23. Which industries benefit the most?

India and the UAE enjoy strong cultural and economic ties. The two countries are important trading partners to each other, with active trade and investment in various fields. Cepa has added new impetus to the relationship between the two countries. This agreement begins to deliver on the leaders’ shared vision to see our bilateral economic and commercial exchanges grow exponentially in the coming years. In this sense, the near-record export figures to the UAE are not surprising. Encouragingly, these trade gains are broad-based. Many industries, including labour-intensive industries such as gems and jewelry, engineered products, automotive, food and chemical products, have already reaped significant benefits from this landmark agreement. In terms of employment, Cepa is expected to create more than 1 million jobs in India in the near future.

Two-way trade now stands at $84 billion; what are the key takeaways from this landmark agreement?

Cepa is a historic agreement with strategic significance for both parties. While creating a favorable trade ecosystem for businesses in both countries, the agreement is helping transform an already strong bilateral relationship into a new-age, future-proof partnership that connects the visions of the leaders of our two friendly nations. The two countries are now recognizing the true complementarity of this powerful economic partnership. In fiscal year 2022-23, our two-way merchandise trade will be approximately $84 billion, a year-on-year increase of 16%. The overall increase in bilateral trade reflects early gains from the agreement. We have set ourselves a five-year goal of increasing bilateral trade in goods from $60 billion (the trade figure before Cepa) to $100 billion. With the extraordinary performance of the first year, I believe we can consider revising these goals upwards. The trade gains in the initial phase after the implementation of Cepa are just the beginning; there are still plenty of opportunities for cooperation between the two countries in key areas such as infrastructure and technology. After Cepa, the two sides are expected to continue to push for the expansion of cooperation boundaries.

The UAE is now India’s third largest trading partner. Has the pandemic changed the dynamics of relying on a country? Countries are, as we say, “standing by our friends” and preparing for the next crisis, should it occur.

Covid has many lessons for all of humanity; one of which is that we cannot deal with the complex and ever-changing challenges of the new era in isolation. We need to work together and collaborate more closely than ever. I’m delighted to be working with great partners like the UAE, where we’ve made progress to build multiple partnerships that span the entire spectrum of our bilateral relationship, whether it’s food and energy security, climate, trade and investment. Covid has also preloaded the debate on reconfiguring supply chains; against this backdrop, India, with its favorable business environment, liberal FDI norms, increasing ease of doing business, rapidly improving physical and digital infrastructure and Prime Minister Modi’s visionary and decisive leadership is largely credited with playing a key role in reconfiguring supply chains and becoming a global manufacturing hub and reliable partner.

The UAE and India are expected to discuss integrating customs and logistics portals to track shipments. Have you set a timeline for possible integration? Is it possible?

India and the UAE share a vision of a future-oriented partnership with a particular focus on collaboration in emerging areas such as sustainability, climate action, innovation, digitalisation, start-ups, food and energy security, health, fintech and skills. It is part of this initiative to explore initiatives such as establishing efficient and integrated single window solutions and virtual trade corridors to reduce the cost and time involved in trade and investment related procedures. The creation of virtual trade corridors is expected to facilitate faster clearance of goods as customs-related approvals and clearances will take place online on both sides. There are no firm timelines, but we intend to prioritize them.

How easy is it for NRI-backed companies in the UAE to do business in India under the agreement?

Cepa has been a catalyst for bilateral trade between India and the UAE since it came into force in May 2022. Many NRI businessmen welcomed the groundbreaking deal, emphasizing that it will bring economic and commercial cooperation to the next level. The trade agreement will enable NRI businesses to improve their competitive position and offer products to the wider Middle East and African market as they can import duty-free goods from India under the agreement. In addition, Cepa has opened up many other new avenues for cooperation between businesses of the two countries. Promoting cooperation between the trade ecosystems of the two countries is the main focus of the agreement. The India-UAE Startup Bridge is a key initiative in this direction. The bridge will act as a one-stop platform where entrepreneurs and stakeholders from both countries can easily access information on the Indian and UAE startup ecosystems. This will further cement the close relationship between the two countries over the past few years.

Is this the era of more Cepa-like bilateral agreements? India and the UAE have already set the example. Is this the end of multilateralism?

Over the past few years, the number of regional trade agreements among WTO members has increased significantly. The India-UAE Cepa is one of the fastest negotiated bilateral comprehensive free trade agreements. It ended in a record 88 days. Trade agreements address the growing aspirations of like-minded trading partners and are negotiated under relevant WTO mandates. In a sense, these RTAs complement work done at the multilateral level to facilitate the flow of goods and services between countries.

Food security is an issue in many parts of the world, the UAE is dependent on imports, and food waste is an issue in India.

How are the two parties progressing in terms of agtech and other food-related investments?

Domestically, India has been running the world’s largest food support program through the Pradhan Mantri Garib Kalyan Ann Yojana (PMGKAY) scheme, which ensures free distribution of wheat and rice to more than 800 million people – a testament to our commitment to food security. As a leading global producer of agricultural commodities, India is also committed to acting as a trusted partner in bilateral, regional and global value chains related to the food industry. There have been many encouraging developments in terms of bilateral cooperation in this critical area. The UAE’s private sector has invested $2.5 billion in renewable energy, logistics, retail and food processing projects in India’s most populous state of Uttar Pradesh. Several other key partnerships launched since May 2022 include sustainable food parks across India that will utilize advanced technologies to reduce waste and conserve water. The two sides are also discussing the “Food Security Corridor Initiative”, which the UAE intends to invest US$2 billion, which is expected not only to ensure food security in the UAE, but also to promote India’s position in the global food value chain.