CEPA between India and UAE was signed on 18 February 2022 and came into force from 1 May 2022. This agreement is playing an important role in promoting bilateral trade and strengthening economic cooperation.
Comprehensive Economic Cooperation Agreement (CEPA) – India and UAE
- Comprehensive Economic Cooperation Agreement (CEPA) is an important trade agreement between India and the United Arab Emirates (UAE). It is designed with the aim of increasing trade, investment and market access.
Features of the agreement
- Tariffs have been reduced to promote trade and investment.
- Key sectors like information technology, engineering, pharmaceuticals and services will benefit.
- Provision to simplify business processes and reduce barriers to trade.
Possible impact
- This agreement will strengthen India–UAE economic relations.
- Goods trade projected to reach $100 billion and services trade $1.5 billion in the next 5 years.
- Will lay a solid foundation for further cooperation in the future.
Importance of India and UAE-CEPA
Growth in bilateral trade
- Target to reach $100 billion in goods trade and $15 billion in services trade in the next 5 years.
- Will strengthen economic ties with UAE, one of India’s largest trading partners in the Gulf region.
- Employment and economic growth: Trade liberalisation and better market access likely to create more than 1 million jobs.
Preferential market access for Indian products
- Will boost exports of labour-intensive sectors.
- Zero-Duty Market Access will be imposed on 90% of India’s exports, improving global competitiveness.
- Strengthening trade ties in the Gulf region: Indian exporters will get an opportunity to expand in UAE’s neighboring markets such as GCC countries, Africa and Europe.
India–UAE Bilateral Relations
Diplomatic Ties
- Diplomatic relations between India and UAE were established in 1972.
- There is a strong strategic partnership between the two countries.
Trade Relations
- UAE is India’s third largest trading partner and second largest export destination.
- India exported goods worth US$35.62 billion to UAE in FY 2023-24.
Defense Cooperation
- Bilateral exercise “Desert Eagle” between the air forces of the two countries.
- Joint military exercise “Desert Cyclone” also organized.