India-UAE: The FTA Harvest
After a hiatus of decade old distaste for the Free Trade Agreements (FTA), the Indian establishment is creating a web of free trade agreements with major strategic partners, which might ensure a better deal for market access this time. In a record time of 88 days India and UAE ( its 4th largest strategic trading partner) concluded a Comprehensive Economic Partnership Agreement ( CEPA -Feb 18,2022) covering over 90% of the tariff lines and enhancing and unleashing great potential for trade and investments on preferential basis. For years India has been hoping to finalize the FTA with the GCC (Gulf Cooperation Council) which is still some distance away. Hence, plucking the low hanging fruit became the preferred option. Likewise, India and Australia signed a mini trade deal overcoming the sensitivities of certain products like in the dairy sector and market access issues. In addition, negotiations with the UK, Canada and Israel are at an advanced stage. Even with the US , despite Biden Administration going slow, New Delhi hopes for some kind of a deal .The US led Indo-Pacific Economic Forum (IPEF) has broadened the economic cooperation potential in an open ended format and matrix providing an alternative to China led RCEP and BRI which India as such does not subscribe to for sovereignty and security reasons.
As such during PM Modi’s eight years of leadership, relations with West Asia especially with GCC countries and particularly with the UAE have been catapulted to a truly strategic orbit which is eking out significant politico-economic dividends. As such, UAE, braving to be part of the Abraham Accords with Israel , showed its independent and bold foreign and economic ‘ No problem’ policy initiatives accompanied by socio-economic reforms . Only recently UAE and Israel signed the first ever FTA in the region. Moreover, a new and younger leadership have more than adequately harnessed the intent to enrich the partnership with India across bilateral to regional to plurilateral context. As per the assessments, CEPA has the potential to promote upward mobility throughout the economic value chain, resulting in hundreds of thousands of job opportunities in both countries. In five years, bilateral trade is expected to grow by USD 100 Bn in goods and USD 15 Bn in services. This ground-breaking agreement will facilitate the free flow of goods, services, capital, technology, and people, as well as mutually beneficial collaboration.
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