February 21, 2022
3 mins read

India industry welcomes trade deal with UAE

India’s industry bodies have welcomed India-United Arab Emirates (UAE) trade pact, citing it as an enabler to increase exports…reports Asian Lite News


On Friday, India and the UAE entered into a Comprehensive Economic Partnership Agreement (CEPA).

The agreement to boost bilateral trade is expected to be implemented within 60 days and entails enhanced market access and reduced tariff.

It is expected that the CEPA will lead to an increase in bilateral trade from the current $60 to $100 billion in the next five years.

The India-UAE CEPA is the first bilateral trade accord concluded by the UAE, and is also India’s first bilateral trade agreement in the Middle East and North Africa (MENA) region.

At present, UAE is India’s second largest export destination next only to the US.


In the first nine months of the current financial year, India’s exports to the UAE has already crossed $20 billion.

“CEPA with UAE will be extremely beneficial to Indian exports, particularly for the labour-intensive sectors like agriculture and processed food, including meat and marine products, gems and jewellery, apparel and textiles, leather and footwear as well as other sectors like engineering, organic chemicals, plastics, paper and paper products, iron and steel, electrical and electronics goods, automobile and auto components and pharmaceuticals,” said A. Sakthivel, President, Federation of Indian Export Organisations.

“The free trade agreement (FTA) will result in exponential growth in India’s exports to UAE and will also open the market to other Gulf Cooperation Council countries.”

According to Engineering Export Promotion Council India Chairman, Mahesh Desai, “The India-UAE FTA will provide major push to the engineering goods exports’ as a result of lowering of import duty on most items.”

Besides, he said the import duty concessions are expected to allow the engineering exports to grow by 10 per cent in the first two years and then the average by nearly 15 per cent in the next three years.

The UAE has been India’s third largest export destination for engineering items despite the constraint of average 5 per cent import duty.

“With the import duty now coming down to ‘zero’ we see the share of engineering goods in UAE’s total import increasing at a fast pace,” Desai added.

Furthermore, Apparel Export Promotion Council (AEPC) Chairman, Narendra Goenka, said, “With India supplying $1,515 million of apparel to the UAE as compared to its total imports of $3,517 million, Indian apparel exports contribute a decent share of 43 per cent.”

“The trade pact would result in a drop of 5 per cent import duty for Indian readymade garments. This will further strengthen the dominant position of Indian apparels in the UAE.”

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In addition, Goenka said the trade pact will particularly benefit the knitted garments segment and increase significant employment opportunities in clusters across India.

The textiles and apparel industry in India is the second largest employer in the country providing direct employment to 45 million people and 60 million people respectively in the allied industries.

“Tracing the export chain, we find that our apparel exports to the UAE also cater to the apparel needs of Saudi Arabia, Kuwait, Bahrain, Oman and the UK,” AEPC Chairman added.

“The UAE is a large retail market with players across the value chain, including major western fashion chains, wholesale buyers from North Africa and the Middle East.”

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