India is likely to export at least 80% of its products to the UAE duty-free once the bilateral free trade pact comes into effect.
The country would be able to export textiles worth an additional $2 billion in the next two years and treble the plastics exports to the UAE under the Comprehensive Economic Partnership Agreement (CEPA), which the two sides will sign on Friday, said people aware of the matter.
The pact is aimed at increasing bilateral trade to $100 billion in the next five years, from $60 billion now. It is also expected to create more than 500,000 jobs in India's gems and jewellery, textiles, engineering products, pharmaceuticals, medical devices, automobiles, leather, sports goods and furniture sectors, as per industry estimates.
"Almost all sensitivities have been taken care of. It is a win-win deal for both the sides. Around one lakh jobs are expected to get created in the UAE," said an official, who did not wish to be identified.
India is keen to get duty-free market access for its fresh and frozen bovine meat, cheese, spices, certain organic chemicals and paper products. Sports goods and furniture exports to the UAE could also get zero-duty access while India's plastic exports could rise to $1.3 billion from about $418 million at present. Industry had identified about 1,100 products, including washing machines, ACs, refrigerators, spices, tobacco, cotton fabrics, textiles and leather, whose exports it wanted to increase through the pact. "We expect exports of plain and studded gems and jewellery to increase to $10 billion by 2023 and double thereafter in the next five years," said the official.
Industry has sought abolition of 5% import duty on the exports of gold, silver and platinum jewellery from India to the UAE, as exports of these goods shrank to $1.18 billion in 2020-21 due to the Covid-19 pandemic. In December last year, the UAE lifted a ban on import of eggs and other poultry products from India, conceding a long-standing demand.
Negotiations for the CEPA were launched in September 2021, India's first such trade deal in the Gulf region. It is likely to cover areas such as goods, services, rules of origin, digital trade, government procurement and investment.
The UAE is India's third largest trade partner. It was India's second-largest export destination after the United States in the previous fiscal, with exports amounting to about $29 billion.
Source:economictimes.com