PM Modi, Crown Prince of Abu Dhabi to sign India-UAE trade pact

This is the country’s biggest trade agreement in the last seven years

India and the United Arab Emirates will sign the first ever bilateral Free Trade Agreement between the two countries on Friday.

The FTA — Comprehensive Economic Partnership Agreement (CEPA) — will be signed during a virtual summit between Prime Minister Narendra Modi and the Crown Prince of Abu Dhabi Sheikh Mohamed bin Zayed al Nahyan. A statement from the Ministry of External Affairs said the summit will provide both the leaders an opportunity to discuss "bilateral cooperation and exchange views on regional and international issues of mutual interest".

Minister of Commerce and Industry Piyush Goyal had announced last week that negotiations on the trade pact had neared conclusion and that it was to be signed soon.

India-UAE trade was expected to revert to pre-pandemic level this year and touch $60 billion in this financial year, an informed source said. Officials also noted that UAE was one of the foreign countries that had displayed interest in investing in the Union Territory of Jammu and Kashmir. Investment from the UAE has steadily grown and has reached $17 billion, which has provided a foundation for signing this biggest trade agreement of the last 7 years.

Sources said that India-UAE trade was no longer burdened by "legacy issues" like Emaar and Etisalat related controversies that disturbed trade ties between the two countries for some years earlier. In recent years, trade-related irritants have been dealt by the High Level Task Force which met last time in October 2021. The already vital energy ties between the two sides are expected to be boosted by the FTA. India has invited UAE's participation in strategic reserves. UAE is India's third largest supplier of crude oil and second largest supplier of LPG and LNG. Renewable energy is the next stop for bilateral energy ties.

The FTA has found enthusiastic support from the Gem and Jewellery Export Promotion Council (GJEPC) which has announced that the deal will push jewellery exports to the Gulf country to the level of $10 billion. The GJEPC said in a statement that the sector has already crossed ₹2.4 lakh crore, marking a post-pandemic recovery. "Among the top 10 gem and jewellery export destinations, UAE has witnessed the highest fall of 41.5% followed by Belgium 15.81%, Japan 12.20%, and Hong Kong 3.06% during April 2021 to January 2022 as compared to April 2019 to January 2020," said GJEPC in a statement.