India, UAE CEPA to come into force on May 1, $40 billion exports likely in FY23

The Comprehensive Economic Partnership Agreement (CEPA) between India and the United Arab Emirates will come into force on May 1, that would allow 90% of the country’s exports a duty-free access to the Emirates.

Officials of the commerce and industry ministry will flag off the first consignment of goods from India to UAE under the pact on Sunday.

The CEPA is likely to benefit about $26 billion worth of Indian products that are currently subjected to 5% import duty by the UAE, India’s third-biggest trading partner behind the US and China.


“We expect exports to go upto $40 billion this year from around $26 billion last year, led by labour intensive sectors such as gems and jewellery,” said Ajay Sahai, director general, Federation of Indian Export Organisations (FIEO).

India will benefit from preferential market access provided by the UAE on over 97 % of its tariff lines which account for 99% of Indian exports to the UAE in value terms, especially for all labour-intensive sectors such as Gems and Jewellery, Textiles, leather, footwear, sports goods, plastics, furniture, agricultural and wood products, engineering products, medical devices, and automobiles.

Sahai said that India’s $250 million to the UAE of pharma exports could see a sharp increase as both sides have also agreed to a separate Annex on pharmaceuticals to facilitate access of Indian pharmaceuticals products, especially automatic registration and marketing authorisation in 90 days for products meeting specified criteria.

New Delhi will offer preferential access to the UAE on over 90% of its tariff lines, including lines of export interest to the UAE.

India and the UAE on February 18 had signed CEPA with a view to boosting bilateral trade to $100 billion over five-years from $60 billion now.

“This $100 billion target can actually be achieved in 2-3 years,” said an industry representative.

The bilateral trade pact is India’s first in the region and the first comprehensive trade agreement with any country in a decade.

In services, India has offered market access to the UAE in around 100 sub-sectors, while Indian service providers will have access to around 111 sub-sectors from the 11 broad service sectors such as ‘business services’, ‘communication services’, ‘construction and related engineering services’, ‘distribution services’, ‘educational services’, ‘environmental services’, ‘financial services’, ‘health related and social services’, ‘tourism and travel related services’, ‘recreational cultural and sporting services’ and ‘transport services’.