Tridge / Mzingaye Ndubiwa – The UAE and India sealed their first-ever bilateral free trade agreement (FTA) in Feb-22, and the pact is expected to double trade between both nations to about USD 100 billion within five years, permitting 80% of Indian goods to enter the UAE market duty-free. The agreement will enable India to expand its market access in the UAE for agricultural products and processed food such as cereals, fruits, vegetables, tea, sugar, and meat. The FTA will help India facilitate proposed agreements with Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia and enhance the UAE’s position as a primary trading hub in the region, advancing its economic diversification in the face of rising trade competition from Saudi Arabia.
The negotiations for the comprehensive economic partnership agreement (CEPA) between both nations began on Sep-21. The FTA is expected to double trade between the countries to about USD 100 billion within five years and permit 80% of Indian goods to enter the UAE market duty-free. This agreement follows the comprehensive economic cooperation and partnership (CECPA) between India and Mauritius in Feb-21 and includes stipulations preserving local industries and providing a passage into West Asia and Africa.
The UAE is the third major trading partner for India and the second-leading export market, with trade between both countries reaching USD 43.3 billion in 2021. The FTA will enable India to expand its market access in the UAE for agricultural goods and processed food such as cereals, fruits, vegetables, tea, sugar, and meat. This agreement follows the lifting of the import ban on poultry products from India by the UAE in 2021 due to growing demand. Both nations have also agreed to improve the resilience and reliability of their food supply chains by strengthening infrastructure and installing reliable logistics services bridging Indian farms to ports, retailers, and wholesalers in the UAE.
In early Feb-22, India sealed an FTA with Turkey and is currently negotiating FTA’s with the EU, the UK, Israel, Australia, and Canada. The agreement with the UAE will help India facilitate proposed agreements with Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia. The UAE seeks to use the FTA to enhance its position as a primary trading hub in the region, advancing its economic diversification in the face of rising trade competition from Saudi Arabia.
