“UAE welcomes broader India-GCC trade deal”

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The India-UAE Free Trade Agreement (FTA) will allow for easier movement of service professionals between the two countries, said UAE Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoudi, in an email interview just over a month old. agreement to enter into force. The FTA has been structured to facilitate higher investment flows for both countries and the bilateral trade agreement also leaves open the possibility of a broader pact with the Gulf Cooperation Council (GCC), made up of six members. India and the United Arab Emirates signed the Comprehensive Economic Partnership Agreement (CEPA) on February 18 – the first FTA finalized by the Narendra Modi government since taking office in 2014. The agreement, negotiated in record time of 88 days, will initially give zero-customs access to 90% of Indian products and 65% of products from the United Arab Emirates.

In the next 10 years, 97% of Indian products will enjoy duty-free access to the UAE market and 90% of products from the UAE will enjoy duty-free access to the Indian market. Edited excerpts:

Why is CEPA important for the UAE?

Thanks to CEPA, UAE companies will now have better access to the world’s fifth largest economy, advantageous tariffs in key export sectors and better market access for our services sector. According to our models, this deal will add $9 billion to the gross domestic product (GDP) of the United Arab Emirates by 2030. The past two years have posed a number of serious challenges to the global economy, with the pandemic impacting particular for supply chains, logistics, aviation, travel and tourism, all critical sectors for the UAE. Despite this, we saw covid-19 as an opportunity to revamp our economy and alongside our country’s Golden Jubilee, the UAE announced a series of bold initiatives to position the country as a global hub. for business, investment and innovation, improving the competitiveness of our industries and attracting all forms of capital – financial, technological and human. Strengthening international trade ties is a cornerstone of this strategy, and India, a long-standing economic partner with whom we have long-standing cultural ties, has been identified as a priority country.

Where do you see the most gains for the UAE, in terms of sectors, services and investment opportunities?

CEPA was designed to be mutually beneficial and to ensure maximum benefit to both countries. The fact that our economies are complementary contributes to this objective. As mentioned, we have secured favorable access for our priority exports, including aluminum, copper, steel and polymers, and we certainly see new opportunities for our services sector, from business and professional services to logistics. , construction, finance and tourism. It is important to note that CEPA allows companies from both countries to access government contracts. Prior to CEPA, we identified significant opportunities in India, and recent years have seen multi-million dollar investments in priority sectors such as solar energy, food corridors, logistics infrastructure and telecommunications. We expect more of these collaborations in the months and years to come.

What areas of services are covered by the pact? What is the liberalized visa regime agreed upon? In which sectors can we expect mutual recognition agreements in the coming months?

Services exports are a major component of the agreement. There are 11 sectors and over 100 sub-sectors covered in total, and include business services, telecommunications, construction and related activities, education, health, environment, finance and insurance, and tourism, travel and transportation services. In terms of the movement of people seeking to provide services under CEPA, this agreement will provide a smoother process on both sides. Details and terms are available when the agreement is posted.

Do you expect UAE investment to increase significantly? Do you have an expected number? What are the sectors that UAE investors are mainly looking for, given that India is expecting an investment of around 100 billion UAE dollars?

Yes. We have structured CEPA to facilitate two-way investment flows. India presents a number of exciting opportunities for our investment community, and this has already been seen in the major deals announced in the years leading up to the deal. For example, in June 2020, Mubadala invested $1.2 billion in Indian telecommunications and digital services company Jio Platforms, while DP World and India’s National Investment and Infrastructure Fund Ltd teamed up to invest $136 million. dollars in the development of a free trade zone in Mumbai. As part of the UAE National Food Security Strategy, UAE companies have pledged to invest $7 billion in a food corridor in India. We therefore foresee new opportunities not only in logistics, food, information and communication technologies and advanced technologies, but also in sectors such as renewable energy, e-commerce and healthcare. health.

Does the India-UAE pact help fast-track India’s deal with the GCC?

The UAE welcomes a broader trade agreement between India and the GCC. Our CEPA with India does not preclude a region-wide agreement and, indeed, there is a specific article in the agreement that leaves this possibility open.

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