India, UAE Sign FTA: Bilateral Trade to Reach $100 Billion Within 5 Years

24 February 2022: India and United Arab Emirates (UAE) signed a Free Trade Agreement (FTA) on 18th February 2022, which is set to reduce tariffs for 80% of goods and give zero duty access to 90% of India’s exports to the UAE. FTA is expected to come into effect in about 60 days, is expected to boost annual bilateral trade to $100 billion within 5 year. Comprehensive Economic Partnership Agreement was signed by Commerce and Industry Minister Piyush Goyal and the UAE’s Minister of Economy Abdulla bin Touq Al Marri after 88 days of negotiations.

“This comprehensive economic partnership agreement covers a wide array of gains for both economies, provides opportunities for business in both economies, “ said Goyal. The Minister added the agreement would boost the country’s exports in a number of labour-oriented sectors including gems and jewellery, textiles, leather, footwear, sports goods, engineering goods, and pharmaceuticals. Annual exports worth about $26 billion from India that currently attract a 5% import duty in the UAE are set to benefit.

An official from the Commerce Ministry said further tariff concessions were expected on both sides over 5 years that would lead to lower tariffs for 98 per cent of exports and 90 per cent of imports from the UAE. Indian exports set to get zero duty access within a further 5 to 10 years, including electronic goods, chemicals and petrochemicals cement, ceramics and machinery accounting for about 9 per cent of the value of current exports to the UAE.