UAE to reduce tariffs on Indian goods by 90% under Cepa deal: Minister

Increase non-oil trade from $45 billion to $100 billion annually in the next five years


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Published: Wed 11 May 2022, 11:20 AM

Abdullah bin Touq Al Marri, Minister of Economy, said the implementation of a Comprehensive Economic Partnership Agreement (Cepa) signed between India and the UAE on February 18, 2022, came into force on May 1 with the arrival of the first tariff-free imports.

In an interview with WAM, Al Marri said the Cepa between the two countries would help encourage trade by reducing custom tariffs by 90 per cent and increase non-oil trade from $45 billion at end of 2021 to $100 billion annually in the next five years.

The UAE chose India to sign the first Cepa, which underscores the strategic ties between the two countries. Since the launch of the Cepa programme as part of the 'Projects of the 50' initiative, the UAE began talks to sign Cepas with several countries of strategic importance both regionally and internationally, aiming to sign eight agreements in 2022, he added.

On the annual growth of the trade exchange between the two countries and their targets over the next five years, Al Marri said the Cepa between UAE and India will intensify their bilateral trade and add 1.7 per cent, or $9 billion, to the UAE’s GDP by 2030, increase UAE’s exports by 1.5 per cent and its imports by 3.8 per cent by 2030. It will also create some 140,000 jobs for talented people and those with specialist skills in the most promising sectors of the country's economy by 2030.

On the new areas of cooperation, he stressed that Cepa offers many advantages, including reducing and cancelling tariffs, widening access to markets, and creating opportunities in vital areas, such as aviation, environment, hospitality, logistics, investment, construction, financial services, and digital trade.

The Cepa will offer numerous advantages to small and medium-sized enterprises (SME) in the private sectors of both countries, Al Marri added. It represents a historically strategic step to promote economic integration and cooperation between the two countries and establish a solid foundation that will open new horizons between their business communities.

The deal will also open access to different markets and create new investments and opportunities in critical areas, including energy, environment, and digital trade, he said. The agreement covers 11 service sectors and more than 100 sub-sectors, including business services, professional services, accounting, real estate, advertising, communications, building and construction, related services, educational services, environmental services, financial services, insurance, social and health services, and travel and tourism service, he added.

Al Marri stressed that India is the UAE’s largest trading partner in terms of non-oil exports, equivalent to 14 per cent of the country's total global exports, while the UAE is also India's third-largest trading partner and accounts for 40 per cent of its trade with Arab countries.

"This historic agreement aims to increase our non-oil bilateral trade to $100 billion annually over the next five years. India is also one of the UAE's largest investment partners, whether in terms of investments issued or received by the country," he added.

Major exports

The most prominent commodities exported from the UAE to India and the commodities imported from India are mainly gold, diamonds and jewellery, machinery, electrical appliances, petroleum and plastics, and minerals that include iron, steel, and aluminium.

The two countries account for more than 16 per cent of the global trade in diamonds, gold and jewellery, and the other country account for 20 per cent of their national gold trade.


The figures show that three per cent of the UAE’s trade during the Covid-19 pandemic was with India, which is among the 15 most important exporters of food commodities in the world, and the UAE is among the most important recipients of its exports from this commodity group, coming in third place.

India is ranked second in terms of the UAE's total trade in food commodities and products, and is one of most important suppliers in the latter’s food commodities market, contributing 10 per cent of the total imports of food commodities and products.

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