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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.
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:
- About CECA.
- About CEPA.
- India’s FTAs with other countries.
Mains Link:
Discuss the significance of India- Australia CECA.
Sources: the Hindu.
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