Piyush Goyal | PC-MoneyControl
India and the UAE have formally launched negotiations for a free trade agreement and the first round of talks will begin from Thursday with an aim to conclude it by end-December, a move aimed at boosting trade and investments between the countries, Commerce and Industry Minister Piyush Goyal said on Wednesday.
The two countries also look to sign a formal agreement, officially dubbed as Comprehensive Economic Partnership Agreement (CEPA), in March 2022 after the completion of internal legal procedures and ratification.
Piyush Goyal, India's Minister of Commerce and Industry and Thani bin Ahmed Al Zeyoudi, United Arab Emirates Minister of State for Foreign Trade formally launched negotiations on the India-United Arab Emirates Comprehensive Economic Partnership Agreement (CEPA).
"Looking to build on the progress made by both countries under the Comprehensive Strategic Partnership signed in 2017; both Ministers expressed a desire to reach a mutually beneficial economic deal. Both sides will aim to conclude negotiations by December 2021 and sign a formal agreement in March 2022 after the completion of internal legal procedures and ratification," said a joint statement.
Al Zeyoudi is here with a high-level delegation to hold talks on improving bilateral economic relations, including expanding the existing trade and investment relationship.
"It is matter of great satisfaction that today we have launched the negotiation for a mutually beneficial Comprehensive Economic Partnership Agreement...The first round of CEPA negotiation will be held tomorrow and day after in Delhi.
"Both sides have drawn up a very aggressive and ambitious timeframe and aim to conclude the negotiation by December 2021 itself. And we hope to sing the formal agreement in the early part of 2022 after the completion of internal legal procedures and necessary ratification process," Goyal said at a media briefing along with the visiting minister.
He said that CEPA will enhance bilateral trade and investment flows and it will assist in our post-Covid economic recovery and future economic growth.
Goyal said the two sides will identify the focal point within the disucssion of the free trade agreement and the early harvest component.
Al Zeyoudi said the relation between the two nations is built on a foundation of 50 years of friendship, mutual trust and cooperation.
He said the agreement will not only help achieve the mutual goals in bilateral trade and increase investment between the two countries but "also shape positive economic outcome on unprecedented scale".
The joint statement said both the ministers emphasized that CEPA will create new jobs, raise living standards, and provide wider social and economic opportunities in both nations.
"A new strategic economic agreement is expected to increase bilateral trade in goods to USD 100 billion within five years of the signed agreement and increase trade in services to USD 15 billion," it said.
The UAE is currently India’s third-largest trading partner with bilateral trade in 2019-20 valued at USD 59 billion. The UAE is also India’s second-largest export destination after the US, with exports valued at about USD 29 billion in 2019-20.
India was the UAE’s second-largest trading partner in 2019, with bilateral non-oil trade valued at USD 41 billion. The UAE is the eighth-largest investor in India, having invested USD 11 billion between April 2000 and March 2021, while investment by Indian companies in the UAE is estimated to be over USD 85 billion.
India's major exports to the UAE include petroleum products, precious metals, stones, gems and jewellery, minerals, food items such as cereals, sugar, fruits and vegetables, tea, meat, and seafood, textiles, engineering and machinery products, and chemicals.
Imports from the UAE include petroleum and petroleum products, precious metals, stones,gems and jewellery, minerals, chemicals and wood and wood products.
India imported USD 10.9 billion of crude oil from the UAE in 2019-2020.
Under a free trade agreement, two trading partners reduce or eliminate customs duties on the maximum number of goods traded between them. Besides, they liberalise norms to enhance trade in services and boost investments.
Goyal also said he would be attending the inaugural ceremony of the Expo 2020 Dubai, which begins on October 1. He said India's participation in the Expo will help boost bilateral trade and investment.
Goyal will co-chair the ninth UAE-India High Level Joint Task Force on Investments with Sheikh Hamed bin Zayed Al Nahyan, Member of the Abu Dhabi Executive Council.
India is building one of the largest pavilion at the Expo.