India likely to push for strict origin norms in UAE FTA talks

India is likely to push for strict origin norms in its proposed free trade agreement (FTA) with the United Arab Emirates (UAE) to determine the source of goods and avoid circumvention as the latter is a trans-shipment hub.

It will also take a call on the UAE's request to include government procurement, small and medium enterprises (SMEs) and e-commerce in the proposed FTA, as this could have a bearing on the country's stance on these issues in the World Trade Organization (WTO).

While India has opposed the plurilaterals on e-commerce and SMEs at the WTO, it is not a signatory to the Agreement on Government Procurement.

The two sides kick-started the first round of the negotiations on the FTA - called the Comprehensive Economic Partnership Agreement (CEPA) - on Thursday, with discussions on tariff concessions on goods, services, rules of origin and non-tariff measures. "Text negotiations and technical meetings on some chapters have started but issues such as investment will be discussed later," said an official.

Investment related issues are likely to be taken up next week, when large sovereign wealth funds from the UAE and other business would participate.

To ensure no circumvention of duties takes place through rerouting of trade routes, India is likely to push for the mandatory 35% value addition in the origin country to claim duty exemption under the pact. This is crucial as the UAE is a trans-shipment hub, making it difficult to implement the rules of origin criterion.