About Comprehensive Economic Partnership Agreement

• India and the United Arab Emirates (UAE)’ Comprehensive Economic Partnership Agreement (CEPA) entered into force in 2022.
• CEPA covers goods, services and digital trade, among others, that will allow 90% of India’s exports a duty-free access to the Emirates.

About the Pact

• The bilateral trade pact is India’s first in the region and the first comprehensive trade agreement with any country in a decade.
• The Agreement is a comprehensive agreement, which will cover Trade in Goods, Rules of Origin, Trade in Services, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures, Dispute Settlement, Movement of Natural Persons, Telecom, Customs Procedures, Pharmaceutical products, Government Procurement, IPR, Investment, Digital Trade and Cooperation in other Areas.

Salient Features of India-UAE CEPA 

• CEPA provides for an institutional mechanism to encourage and improve trade between the two countries. The CEPA between India and the UAE covers almost all the tariff lines dealt in by India and the UAE.
• India will benefit from preferential market access provided by the UAE on over 97% of its tariff lines which account for 99% of Indian exports to the UAE in value terms, especially for all labour-intensive sectors such as Gems and Jewellery, Textiles, leather, footwear, etc. India will also be offering preferential access to the UAE on over 90% of its tariff lines.
• As regards trade in services, India has offered market access to the UAE in around 100 sub-sectors, while Indian service providers will have access to around 111 sub-sectors from broad service sectors such as ‘business services’, ‘communication services’, ‘educational services’, ‘tourism and travel related services’, ‘recreational cultural and sporting services’, etc.
• Both sides have also agreed to a separate Annex on Pharmaceuticals to facilitate access of Indian pharmaceuticals products, especially automatic registration and marketing authorisation in 90 days for products meeting specified criteria.

Goods excluded from the deal

• India has excluded certain goods from the agreement through a “sensitive list” of products amounting to 10 per cent of tariff lines that are excluded completely from the agreement.
• Dairy, fruits, vegetables, cereals, tea, coffee, sugar, food preparations, tobacco, toys, plastics, scrap of aluminium, and copper are among the products that are excluded from the pact. Certain other areas such as those that have seen sharp growth in domestic production or areas where the government is incentivising manufacturing through production-linked incentive schemes have also been excluded from the agreement.
• The government has emphasised that this agreement contains strict rules of origin provisions to prevent other countries from using the agreement to reroute their exports through UAE to benefit from lower tariffs.
• Most products require a value addition of 40 per cent in the exporting country under the new agreement to qualify for lower tariffs under the agreement. 
• The agreement also has safeguard mechanisms that would be triggered if there was a significant surge in imports of a specific product in either country.

Why in News?

• Union Minister of Commerce & Industry Piyush Goyal said that India and UAE aspire to expand their bilateral trade to US$ 100 Billion. 
• He said bilateral trade has increased under the India UAE Comprehensive Economic Partnership Agreement (CEPA). 

https://pib.gov.in/PressReleasePage.aspx?PRID=1994986