A way forward in agricultural trade with UAE

India and UAE have been strategic partners right since diplomatic ties were established in 1972. The two nations signed the historic Comprehensive Economic Partnership Agreement (CEPA) during the virtual summit meeting between Prime Minister Narendra Modi and Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi on February 18, aimed at boosting the merchandise trade between the countries to $100 billion over the next five years.

The agreement is set to benefit almost 90 per cent of the trade, both exports and imports, between the two countries. The free trade pact will be further deepened over the next decade with the UAE set to eliminate import duties on 97 per cent of tariff lines in the next five years, while India will bring down tariffs to zero on 90 per cent of items over ten years.

In a first of its kind, there is a digital trade element to enhance cooperation in paperless trading, digital payments and online consumer protection. Bilateral trade volumes would increase manifold when two-way investment flows pick up. The CEPA proposes an investment zone in India Mart at the Jebel Ali free zone. The bilateral trade between India and UAE $43,318.41 million with exports of $16,695.42 million and imports of $26,622.99 million. There was a negative trade balance to the tune of $9,927.57 in 2021- 22.(Source: DGCIS).

India’s export share of principal commodities in the UAE

In India’s export of principal commodities of all agri products, UAE is the 4th largest export destination(value: $1865.82 million, quantity: 20,61,039.77 tonnes) with the share of 5.23 per cent in the current year 2021-22 (April-December) in the global market. The major products exported from India during the referred period are sugar, basmati rice, spices, marine products, miscellaneous processed items, wheat, fresh fruits, cashew, buffalo meat, non-basmati rice etc.

During this current period, UAE was the top destination and ranked first for major agri product exports namely alcoholic beverages, cashew, fresh fruits, sheep/goat meat, tobacco manufactured, pulses etc. UAE being the leading bilateral partner for India, it has also been observed that in India’s export of principal commodities, UAE dominated in the top five countries during the current year 2021-22 (April-December) in the export destination of basmati rice, cereal preparations, dairy products, floriculture, fresh vegetables, fruits/ vegetable seeds, milled products, misc. Processed items, other cereals, processed fruits and juices, processed meat, spices, sugar, tea, vegetable oils, wheat etc.

Also read

India-UAE CEPA: Import duties on 90% of Indian imports to be immediately eliminated

During the last decade, UAE had been the second-largest export destination of India’s export of all principal agri commodities. There had been a 5 per cent duty for a few commodities which made India uncompetitive compared to the products UAE imported from other competitive countries. The free trade agreement (FTA) and duty concessions will provide scope for Indian manufacturers to compete in the UAE market resulting in exponential growth in India’s export to UAE and will also pave the way to tap the opportunities in other Gulf Cooperation Council countries.

Export of APEDA’s scheduled products in the UAE market agri exports from India had been growing gradually to the UAE market, export of APEDA’s scheduled products had grown from $69.52 million (quantity 1,01,971.95 tonnes) in 1987-88 to $1,238.50 million (14,72,561.09 tonnes) in 2020-21. 

Status of UAE in major importing countries

In the current year, 2021-22 (April-November 2021-22), the UAE is the second-largest importing country with a share of 6.4% in the export of APEDA’s scheduled products (value:$971.61 million; Quantity: 11,96,144.54 tonnes). In the export of APEDA’s scheduled products to major importing countries, the UAE was the second-largest importer.

Star products in the export of APEDA’s scheduled products

There is a shifting paradigm in the export of agri products to UAE, the top ten potential products exported to UAE has been changing trends paving the way to new additional products in the last few decades, conclusively giving ample opportunities for a range of 15-20 products to put on a strong foothold in UAE market. The current trade pact will reduce 5 per cent import duty for Indian products in the UAE market, making us better off than other competitors. The prime products with ample export opportunities in the UAE market are basmati rice, non-basmati rice, buffalo meat, sheep/goat meat, miscellaneous preparation, fresh onions, pulses, fresh mangoes, alcoholic beverages, cereal preparations, milled products, dairy products, mango pulp, bananas, grapes etc. 

In furtherance of the UAE India Food Security Corridor initiative, the Government of India, through APEDA, has signed an MoU with Government of UAE through its nodal agency Al Dhara Holding SP LLC for procurement of food and food products from India as well as to sell to buyers in UAE as a part of UAE food security strategy and DP World FZE, a subsidiary of Government of Dubai (A leading provider of worldwide smart end-to-end supply chain logistics, enabling flow of trade across the globe).

The MoU signed between both the countries will promote the exports from India to UAE and strengthen the trade further between both the countries. India’s Agri Export to UAE was $1926.19 million in 2020-21.

Opportunities for APEDA’s scheduled products in UAE market

Buffalo meat was one of the prime products exported to the UAE. Being the largest producer of buffalo meat, India will now be in a better position with the current CEPA to increase further share in the UAE market. In the export of APEDA’s scheduled products to UAE, India ranks first with a share of 10 per cent in 2020. India is the leading supplier of rice with a share of 72.15 per cent, fresh onions(India’s share 45.84 per cent), fresh grapes (India’s share 18.7 per cent), milled products (India’s share 51.06 per cent), fruits and vegetable seeds (India’s share 32.16 per cent), guar gum(India’s share 60.33 per cent), albumin (eggs & milk)(India’s share 16.93 per cent).

India is looking to tap ample opportunities to export buffalo meat, dairy products, cucumbers and gherkins, miscellaneous preparations, processed food, alcoholic beverages, natural honey etc. The sensitive items include dairy, fruits and vegetables, cereals, food preparation etc. With diverse climatic conditions, India is the second-largest producer of fruits and vegetables in the world, is in an advantageous position to march ahead with the current CEPA signed with the most potential export nation and tap the UAE requirements further with MoUs with DP World and Al Dhara. 

India’s performance is also linked to diversification of fruits and vegetables into value-added diversified products. The products are rising up along with changing export trends and global demand for organic and nutritious products such as ginger, turmeric, moringa, jackfruit and jackfruit based products, high value-added product saffron from J&K had already been promoted in the UAE market.

APEDA is constantly expanding the export basket by adding innovative products such as pomegranate arils, jackfruit, dragon fruit, drumstick, chilled baby corn, snow peas, along with organic herbs, turmeric spices, dehydrated vegetables etc along with a focused approach to increasing the export of millets. The organic exports to UAE have also witnessed a growth of appx 61 per cent in terms of export value in US$. With the strategic significance of India UAE CEPA, APEDA, with its 49 per cent share in India’s agri exports, will have a significant share in the proposed $100 billion bilateral trade with the demand for potential products in the UAE market along with the promotion of additional new innovative products in APEDA’s agri export basket.

(The author is Chairman, APEDA)

COMMENT NOW