India-UAE CEPA: 1st year trade up 12% to $31.3 billion
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India-UAE Comprehensive Economic Partnership Agreement (CEPA) has been one of the most successful free trade agreements signed by the country. Sunil Barthwal, secretary, Department of Commerce said India exported $31.3 billion worth of goods to UAE during 2022-23, about 12% higher than $28 billion worth of exports in 2021-22. The export performance was beyond the normal growth as India’s exports to the rest of the world, excluding UAE, grew only 4.8% during the same period under comparison, he informed.
Analysing the performance of India-UAE CEPA on completion of one year on May 1, the secretary said the agreement has also surpassed almost all our free trade agreements in terms of utilization within one year of implementation. The certificates of origin (COO) issued for preferential tax treatment under CEPA between March 2022 and March 2023 totalled 54,142, second only to 149,206 COOs issued under the ASEAN-India Free Trade Agreement (ASEAN-India FTA), Barthwal explained. Incidentally ASEAN is a trade bloc of 10 countries while UAE is a federation of seven emirates.
India’s top gainers from the CEPA are petroleum fuels and byproducts (36% growth – from $6.2 billion in 2021-22 to $8.4 billion in 2022-23), electrical machinery and equipment (32% growth – from $2.8 billion to $3.7 billion), gems and jewellery (17% from $4.9 billion to $5.7 billion), machinery and mechanical appliances (19% from $0.9 billion to $1.1 billion) and automobiles (42% from $0.5 billion to $0.7 billion). Cereals, essential oils, coffee, tea, spices, vegetables, chemical products etc also benefited from the CEPA.
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Iron and steel, apparel and clothing accessories were among the goods that did not perform as expected during the last one year.
On import front, the maximum gainers were products like mineral fuels, natual or cultured pearls, precious or semi precious stones, jewellery, plastic items, iron and steel, etc.
The secretary said that India’s priority sectors like labour intensive sectors (leather, gems and jewellery) and emerging sectors showed substantial growth in exports under CEPA. Despite good growth there is still potential to grow more and the ministry has set a $50 billion export target for UAE for 2026-27, he added.