The India-UAE Comprehensive Free Trade Agreement is expected to benefit around $26 billion worth of domestic products like gemstones and jewelry which are currently subject to 5% import duty by the Gulf nation, an official said.
Labor-intensive industries such as textiles, leather, footwear, sporting goods, plastics, furniture, agricultural and wood products, engineering, pharmaceuticals and devices medical, and automobiles would benefit considerably from the pact.
Segments of the services sector that would benefit from a significant boost from the pact include IT services, audiovisual, education, health, tourism, travel, nursing, engineering and accounting, the manager said.
India and the United Arab Emirates signed the Comprehensive Economic Partnership Agreement (CEPA) on February 18 with a view to increasing bilateral trade in goods to $100 billion over a five-year period and creating thousands of jobs.
“While UAE is already India’s second largest export destination with exports valued at around $29 billion in 2019-20, CEPA with UAE is expected to benefit around $26 billion. of Indian products subject to a 5% import duty by the United Arab Emirates,” the official said.
Exports of ordinary gold and gold studded jewelery are estimated to reach USD 10 billion in 2023 and tariff concessions offered to the UAE by India on products like gold will reduce the cost of importing inputs . A further increase in textile exports is expected to reach USD 2 billion over the next five years.
“With duty-free rates, India can cater to the needs of the UAE’s hospital segment through the sale of institutional home textiles like bed and bath linens as well as contract textiles – beach towels, bed linens, etc. salon and spa, etc.,” the manager said.
Under the terms of the agreement, the UAE is proposing comprehensive tariff elimination on over 97% of its tariff lines (or products) corresponding to 99% of India’s exports by value.
“A revolutionary feature of this agreement is a permanent safeguard mechanism which has been agreed and which can be resorted to in a situation of sudden increase in imports. of origin, which will disable the circumvention of products from other countries through the FTA route,” the official added.
In addition, there is a separate exclusion list for certain products to protect domestic industry. The goods on this list would remain outside the scope of the pact. The Tariff Rate Quotas (TRQs) offered by India to the UAE on certain items of export interest will only be reviewed after 10 years.
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