India’s exports to the UAE are likely to touch an all-time high of $32 billion in fiscal 2022-23, posting an increase of around 14 per cent over $28.04 billion of exports in 2021-22, with a rise in utilisation of the India-UAE free trade agreement (FTA) signed earlier this year, per projections made by the Commerce & Industry Ministry.

“The two countries are also set to discuss the possible integration of their customs and logistics portals for tracking shipments on real time basis and expediting cargo movement as officials prepare for the annual review of the FTA in May this year,” a senior official said.

The India-UAE Comprehensive Economic Partnership Agreement (CEPA), implemented in May 2022, has so far significantly benefitted exports from sectors such as gems & jewellery, electrical machinery & equipment and machinery & mechanical appliances, according to data compiled by the Commerce & Industry Ministry. 

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Engineering exports, which account for almost a fourth of total exports of goods from the country, also posted a 4.24 per cent decline in April-February 2022-23 to $96.85 billion from $101.14 billion in April-February 2021-22 (PIC:Canva.com)

Engineering goods exports to US, China, Germany, Italy shrink in February 2023: EEPC

Other factors

Other beneficiary sectors include automobiles, essential oils, perfumery and cosmetics, articles of iron and steel, coffee, tea and spices, sugar and chemical products.

“There has been a steady growth in utilisation of the FTA as reflected in the monthly numbers of preferential certificate of origin (COO) issued that has stabilised over the last few months,” the official said.

COOs are issued by the government to certify that the item to be exported under an FTA meets the given criteria for establishing that it originated in that country. The partner country making the imports then imposes preferential duties on the items per what is agreed in the FTA. Rising number of COOs being issued means that a larger number of exporters are using the FTA route to ship their products.

The COOs issued by India in February 2023 was 6,944 against 2,316 such certificates issued in June 2022 and 415 certificates issued in May 2022.

India’s exports to the UAE in June-February 2022-23 increased 10.4 percent (year-on-year) to $23.03 billion, while exports to rest of the world increased 0.9 per cent to $296.04 billion.

India’s non-oil exports to the UAE rose 6.5 per cent year-on-year in June-February 2022-23 to $17.36 billion, in comparison to a 4.2 percent drop in non-oil exports to the rest of the world to $237.37 billion in June-February 2022-23.

The UAE is India’s third-largest trading partner, after the US and China, with bilateral trade in April-January 2022-23 period at $70.19 billion.

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