The United Arab Emirates (UAE) and India signed a Comprehensive Economic Partnership Agreement (CEPA) on 18 February 2022 to strengthen economic ties and boost trade and investment between both countries. The agreement has come into effect from 1 May 2022 and amongst other benefits, would set to liberalise tariffs on trade between the two countries.
Through this CEPA, both the countries are projected to achieve significant economic benefits in the form of access to quality education, liberalization of customs tariffs, ease of facilitating access to respective markets and ease of movement of skilled labor to support these economic initiatives.
The UAE proposes to double its economy in the coming decade and attract top human capital; foreign trade will be an integral pillar of this development; this is where the CEPA is expected to play an active role in achieving this objective.
India is the UAE’s largest trading partner in terms of exports and the ninth largest recipient of foreign direct investment from the UAE. The CEPA will enhance this existing long-standing, and robust relationship between the UAE and India and is expected to boost the merchandise trade between the two countries to USD 100bn over the next five years.
Some of the key businesses set to benefit from the CEPA are:
- Energy
- Environment
- Digital trade
- Intellectual property rights
The CEPA also covers 11 sectors and 100 sub-service sectors to benefit from this agreement.
BENEFITS TO BE EXPECTED FROM THE CEPA
The CEPA will promote two-way economic benefits in various sectors. Some of these economic benefits are:
- Increased investment flows, lower tariffs, and new opportunities for key sectors in both India and the UAE such as aviation, environment, hospitality, investment, financial services and digital trade and more.
- CEPA is expected to boost the national economy of the UAE by 1.7% in the next 10 years.
- CEPA will also make it easier for small and medium enterprises to go global by granting them access to new customers, networks, and avenues of collaboration. The private sector will benefit from this agreement as it remains at the forefront of innovation and economic growth.
CEPAs or trade agreements are considered to be central to the UAE’s efforts to build the economy over the next 50 years and solidify its position as a global economic hub. The Ministry of Economy has launched a web-page providing the details of UAE-India CEPA.
To read more about UAE-India CEPA, download our article.
To help businesses explore opportunities under the newly signed CEPA, please reach out to our expert teams in India and the UAE.
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