India, UAE trade pact
Part of: Prelims and GS II – International Relations
Context: The free trade agreement between India and the United Arab Emirates (UAE) is likely to come into effect from May 1 this year, under which domestic exporters of as many as 6,090 goods from sectors such as textiles, agriculture, dry fruits, gem and jewellery would get duty-free access to the UAE market.
- The Comprehensive Economic Partnership Agreement (CEPA) was signed by India and the United Arab Emirates (UAE) in February which aims to boost bilateral trade to $100 billion in the next five years from current $60 billion.
- The two countries have agreed to set up a technical council on Investment, Trade Promotion and Facilitation, as part of the agreement signed.
- UAE is offering duty elimination on over 97% of its products which account for 99% of Indian exports here in value terms.
India and UAE Relations
- India and the UAE established diplomatic relations in 1972.
- The greater push has been achieved in bilateral relations when the visit of India’s Prime Minister to the UAE in August 2015 marked the beginning of a new strategic partnership between the two countries.
- Further, during the visit of the Crown Prince of Abu Dhabi to India in January 2017 as the chief guest at India’s Republic Day celebrations, it was agreed that bilateral relations were to be upgraded to a comprehensive strategic partnership.
- This gave momentum to launching negotiations for an India-UAE comprehensive economic partnership agreement.
Economic Significance of the UAE
- The UAE has emerged as an important economic hub not globally.
- Although the UAE has diversified its economy, the hydrocarbon sector remains very important followed by services and manufacturing.
News Source: TH