Government authorities believe that exports to the country would reach the $50 billion level by the financial year 2026–2027 (FY27) since India’s Comprehensive Economic Partnership Agreement (CEPA) trade treaty with the United Arab Emirates (UAE) has become the “fastest used” trade agreement.
“We should be able to reach $50 billion exports in 2026–2027, five years after (signing) CEPA,” Sunil Barthwal, the secretary of commerce, told reporters on the first anniversary of the accord.
“Trade between the two nations has greatly increased. Emerging industries that require a lot of labour have seen growth…The way CEPA has been used is impressive. In contrast to most free trade agreements (FTAs), a large portion of commerce occurs through preferential channels in this FTA, according to Barthwal.
The Commerce Department’s analysis indicates that between May 2022 and India, March 2023 -In terms of usage, UAE CEPA has outperformed practically all other FTAs. At 1.49 lakh, India-Association of Southeast Asian Nations (ASEAN) has the most certificates of origin (COO). The trade agreement with the UAE came next, and exporters were given 54,142 COOs to take advantage of the trade agreement’s favourable treatment for reduced tariff rates.
But after a joint mechanism established by the two countries meets next month and a more thorough data exchange with the UAE is conducted, it will be clearer how to use the trade agreement, according to government sources.
The Department of Commerce’s preliminary statistics indicates that India exported commodities worth $31.3 billion from April to March of 2022–23 (FY23), an increase from the previous year. 4.8% year over year (YoY). India’s total merchandise exports increased by 5% over that time, reaching $444 billion.The increase in exports can be ascribed to increased demand from industries including equipment, autos, and gems & jewellery. Due to limitations being imposed and weak demand, respectively, exports of goods like iron and steel and textiles have decreased.
India will also examine other trade-related obstacles, such as difficulties in conducting business and difficulties with rules of origin or certification, and seek to make them easier. The combined mechanism will be used to overcome these problems.
Regarding imports, oil shipments into the country increased 36% to $27.7 billion in FY23. imports of spaceships, planes, and their components increased from $39 million to $1.9 billion in just one year.
Government officials stated that data for the month of April 2022 was also included in the research to maintain simplicity, even though the trade agreement with the UAE began on May 1 of last year. The department of commerce will make data for the month of April 2023 available on May 15.
Both nations have extended tariff discounts on the export of goods of shared interest under the trade agreement. UAE provided India with concessions on more than 97% of its tariff lines, or 99% of trade in terms of value. To the UAE, India has granted preferential access on more than 90% of its tariff lines, including lines of UAE exporters have an interest.
