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India’s export to the UAE is likely to increase to $50 billion in 2026-27, from $31.3 billion in 2022-23, going by the utilisation of the bilateral Comprehensive Economic Partnership Agreement (CEPA) in the first year itself, Commerce Secretary Sunil Barthwal has said.
“The India-UAE CEPA has surpassed almost all other FTAs in terms of utilisation (with the exception of India-ASEAN FTA) and certain sectors have done very well…In the five years of trade after CEPA, I feel that we should be able to reach $50 billion in exports. I am very sure that going by the kind of response that we are hearing, we will definitely reach that,” Barthwal said addressing a media briefing on the completion of one year of the India-UAE CEPA on Monday.
Benefits of CEPA
The benefits of the India-UAE CEPA, implemented on May 1 2022, have already started showing with India’s exports to the UAE in 2022-23 rising by 11.8 per cent to $31.3 billion, compared to a 5.3 per cent overall increase in goods exports, the Secretary explained.
The sectors that benefitted the most include mineral fuel and oil, electrical machinery, gems & jewellery, automobiles, essential oils, perfumer & cosmetics, machinery & mechanical appliances and cereals, per details shared by the Commerce Department.
Exports of gems and jewellery from India to the UAE rose by 17 per cent to $5.8 billion in the last fiscal, electrical machinery shipments increased by 32 per cent to $3.65 billion, while automobiles exports rose by 42 per cent to $715.58 million. However, there was a dip in exports of iron and steel and apparel.
Both sides aim to double bilateral trade in goods to $100 billion and enhance trade in services to over $15 billion within five years of implementation.
Under the CEPA, tariffs on 97 per cent of India’s export lines to the UAE are to be reduced to zero with tariff elimination on 90 per cent items taking place immediately.
Imports jump
While imports from the UAE grew by 18.8 per cent to $53.2 billion in the last fiscal, almost 90 per cent of the rise could be attributed to the increase in imports of oil. Import of petroleum and related products from the UAE increased 36 per cent to $27.6 billion in 2022-23. Increase in import of non-petroleum items from the UAE was a lower 4.1 per cent at $25.5 billion.
Utilisation of the CEPA in India was amongst the highest compared to other FTAs signed by the country that are currently in force. As many as 54,142 COO (Certificate of Origin) were issued under the India-UAE CEPA in the May 2022-March 2023 period, which was second only to the COOs issued under the India-ASEAN FTA.
COOs are issued by the government certifying that an item of export originated from the country (and had not been imported from a third country) and are used to claim duty concessions in the importing country.
Utilisation of the India-UAE CEPA was more than all other FTAs including ones with Korea, Japan and Australia.
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