The negotiations for free trade agreement (FTA) between India and the United Arab Emirates (UAE) are under way. But if the negotiations are further delayed, the other nations of the Gulf Cooperation Council can also join the FTA with India with the same terms and conditions as the UAE.
According to the India-UAE Comprehensive Economic Partnership Agreement (CEPA), “any country, group of countries, or customs territory (hereinafter referred to as the “acceding party”) may accede to this agreement subject to such terms and conditions as may be agreed between the acceding party and the parties to this agreement and following approval in accordance with following internal legal procedures of the acceding party and the parties to this agreement. Such accession shall be effective sixty (60) days from the date of deposit of the instrument of accession with the joint committee.”
The clause was added to encourage other countries to join the pact, making it a regional agreement. It will give the textile industry of both countries, especially India, a boost to have beneficiary deals with other countries of the GCC apart from the UAE. GCC is a union of six countries in the Gulf region: Saudi Arabia, the UAE, Qatar, Kuwait, Oman, and Bahrain.
Six months ago, when India and the UAE signed CEPA, it pushed the trade between the two countries from USD 73 billion to USD 88 billion. Apart from the drastic increase in trade between the countries, the pact also welcomed investment in India, like USD 2 billion in Reliance Jio, USD 1 billion in Tata Motors, and USD 2 billion in Adani Renewables. India has also invested USD 2 billion in petrochemical joint ventures in the UAE.
Narendra Goenka, Chairman of the Apparel Export Promotion Council (AEPC), said, “With India supplying USD 1,515 million of apparel to the UAE as against its total imports of USD 3,517 million, Indian apparel exports contribute a decent share of 43 percent. The trade pact would result in a drop of 5 percent in import duty for Indian ready-made garments. This will further strengthen the dominant position of Indian apparel in the UAE.”
If the FTA is signed between India and the GCC, it will greatly affect the textile industry in a positive way. According to the ministry of commerce, the UAE is already one of the top five destinations for Indian textile and clothing exports, along with the US, Bangladesh, the UK, and Germany.
Council for Leather Exports Chairman Sanjay Leekha said that the UAE is one of the sector’s key markets, and it would also give access to certain EU countries and Africa.
Overall, after the negotiations between both countries are completed, the Indian textile industry, especially for exports, will see surging growth as the agreement will give India access to Gulf countries, some EU countries, and even some parts of Africa.
