The UAE-India comprehensive economic partnership agreement (CEPA) is paying rich dividends, with the Gulf country’s exports to India posting a robust 65 percent jump to $9.1 billion (INR 724.16 billion) during May-June period, latest trade figures reveal.
Crude oil and gold exports were among the major items that boosted UAE’s exports to India in the initial two months of the operations of the bilateral free trade treaty.
Indian too made significant gains during the period, with its exports to the UAE rising by 16.5 percent to $5.27 billion (INR 419.81 billion).
Cosmetics, essential oils, vehicles and tobacco products figured in the Indian export basket to the UAE which posted impressive gains in the initial period of the bilateral free trade pact.
The UAE-India free trade treaty came into operation from May 1, 2022.
The relatively higher imports from the UAE by India pushed its trade gap with the West Asian country four-fold to about $.3.9 billion during May-June 2022.
Dr Ajay Sahai, Director General and chief executive officer of Federation of Indian Export Organisations (FIEO), the country’s premier trade body, said though the overall Indian exports to UAE grew by only about 10 percent in May, the exports growth has been impressive in many products in the first month of the operation of the CEPA.
“Since the industry will take some time to exploit the potential offered by the CEPA, we expect exponential growth in our exports – and imports – from UAE as compared to our overall exports,” Dr Sahai told Arabian Business.
“We are looking to breach $100 billion of bilateral trade in next 3 years,” the trade body chief said.
Indian exports mainly comprised value-added and finished goods such as textiles, gems and jewellery, machinery, footwear, and automobiles.
According to data, of the $4.9 billion worth of imports from the UAE in May, oil imports were worth $2.9 billion.
Non-crude imports from the UAE to India rose by 43 in the first of CEPA.
Policy experts said India’s widening trade gap with the UAE was not a major concern as India largely imports raw materials from the Gulf country.
According to them, the trade accord with the UAE, a key energy supplier and a significant market, will offer long-term benefits to India.
According to latest available trade data, Indian automobiles exports to the UAE surged by a whopping 192 percent in May, followed by footwear exports (73%), gems and jewellery exports (33%), tea, coffee, and spices (50%) and ready-made textiles (42%).
Senior officials at the Indian trade body said exporters expect India to sell $40 billion of goods to the UAE in the current fiscal year from $28 billion in FY22.
The bilateral free trade agreement has eliminated duties for about 90 percent of India’s exports in value terms to the UAE, covering sectors including gems and jewellery, textiles, leather, and engineering goods, while India has extended a one percent duty concession for gold imports from the UAE for up to 200 tonnes of inbound shipments under the trade pact.
India has also offered significant tariff concessions on dates, petroleum products, petrochemicals, metals, and minerals to the UAE under the pact.
The UAE-India CEPA, negotiated in record 88 days, was signed on 18 February this year.