India-UAE Comprehensive Economic Partnership Agreement (CEPA): – INSIGHTSIAS

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GS Paper 2

Topics Covered: Important Bilateral Agreements.

 

Context:

The India-UAE Comprehensive Economic Partnership Agreement (CEPA), the biggest bilateral trade pact between the two major economies, was activated on 1st May.

  • The agreement was signed on February 18 between the two sides.

 

Current Affairs

 

As per the CEPA signed between India and the UAE:

  • 90% of India’s exports will have duty-free access to the Emirates.
  • It covers goods, services and digital trade.

 

Benefits:

  • The CEPA is likely to benefit about $26 billion worth of Indian products that are currently subjected to 5% import duty by the UAE, India’s third-biggest trading partner behind the US and China.
  • It is expected that the CEPA will lead to an increase in bilateral trade from the current $60 bn to $100 bn in the next 5 years.
  • Through the pact, Indian exporters will also get access to the much larger Arab and African markets.

 

What is CEPA?

It is a kind of free trade pact which covers negotiation on the trade in services and investment, and other areas of economic partnership.

  • It may even consider negotiation on areas such as trade facilitation and customs cooperation, competition, and Intellectual Property Rights.
  • Partnership agreements or cooperation agreements are more comprehensive than Free Trade Agreements.
  • CEPA also looks into the regulatory aspect of trade and encompasses an agreement covering the regulatory issues.

 

Status of Trade:

  • Trade: From USD 180 million per annum in the 1970s, India-UAE bilateral trade has steadily increased to USD 60 billion in FY 2019-20 making the UAE, India’s third-largest trading partner.
  • Investments: The UAE is also the eighth largest investor in India with an estimated investment of USD 18 billion.

 

InstaLinks:

Prelims Link:

  1. About CECA.
  2. About CEPA.
  3. India’s FTAs with other countries.

Mains Link:

Discuss the significance of India- Australia CECA.

Sources: the Hindu.

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