An economic partnership agreement was signed between India and the UAE on Friday that will allow duty-free exports of food products, textiles, gems and jewellery, pharmaceuticals, and easier access for Indian professionals to the Emirates.
In addition to India’s largest trading partner, China, the free trade agreement with UAE signals the government’s return to signing free trade agreements in its efforts to push exports and the movement of Indian professionals abroad.
Both nations have agreed to cut import duties on a wide range of products and to create a hydrogen task force to scale up the technology.
The UAE’s de facto leader, Sheikh Mohammed bin Zayed Al Nahyan, said during a virtual summit with India’s Prime Minister, Narendra Modi, on Friday that India is one of the UAE’s most important strategic partners.
It will provide significant benefits to UAE and Indian businesses, including reduced tariffs and enhanced market access, as well as bring new life to the trading corridors from Africa to Asia and set the stage for growth and prosperity,” he said.
Indian Prime Minister Modi said, “This Agreement demonstrates the deep friendship, shared vision, and trust between the two countries. I am sure this will herald a new era in our bilateral economic relations.”
The UAE and India have deepened their ties through the partnership. The UAE is India’s third-largest trade partner, with bilateral trade reaching $60 billion in the current fiscal year.
Non-oil exports from the UAE are also an important source of revenue for India, as it accounts for almost 14% of UAE non-oil exports globally.
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Tariffs on more than 80% of goods going to India will be eliminated, creating significant economic benefits for the UAE and India through increased access to markets, new investment opportunities and more opportunities in key sectors, said Thani Al Zeyoudi, UAE minister of state for the economy.
As well as raising bilateral trade in goods to over $100 billion over the next five years, the deal is expected to boost trade in services by over $15 billion. The minister expects the deal to boost UAE GDP by 1.7% in the next ten years, boost exports, and create more jobs.
The minister says that sectors set to benefit include business services, telecommunications, construction, education, the environment, financial services, health services, tourism, hospitality, and maritime and air transport.
