Kerala

Kerala benefiting from duty-free access to UAE

Prime Minister Narendra Modi being welcomed by UAE President Sheikh Mohamed bin Zayed Al Nahyan upon his arrival in Abu Dhabi.

Prime Minister Narendra Modi being welcomed by UAE President Sheikh Mohamed bin Zayed Al Nahyan upon his arrival in Abu Dhabi. | Photo Credit: PTI

Kerala is reaping the reward of the India-UAE bilateral Comprehensive Economic Partnership Agreement (CEPA) which came into force on May 1.

Exports from the State are expected to go up in the coming months even as a visit by Prime Minister Narendra Modi to Abu Dhabi on Tuesday appeared to have cooled the embers with the Gulf Cooperation Council (GCC) nations over the alleged negative remarks by former BJP spokespersons about the Prophet.

In fact, the UAE as well as Saudi Arabia reacted more judiciously unlike Iran, Kuwait, and Qatar, which summoned Indian envoys to lodge a protest note and demand a public apology from the Indian government over the remarks.

The CEPA, which was signed in February this year, is expected to increase the total value of exports from Kerala to the UAE between $650 and $700 million this fiscal. “The exports from the State to the UAE was $500 million during 2021-22,” K.M. Harilal, Joint Director General of Foreign Trade, Kochi, attached to the Ministry of Commerce and Industry, told The Hindu on Tuesday.

Hitherto only vegetables and fruits did not attract customs duty. All other Indian consignments were imposed a 5% duty in the UAE. “Obviously, the India-UAE free trade agreement will give an edge to India over other countries. Kerala contributes a substantial portion of export in the gold jewellery segment. Last fiscal, exports were around $100 million. Now, this benefit will reach consumers and importers in the UAE,” Mr. Harilal said.

The State imports cashew worth $45 million from the UAE annually, besides spices ($38 million), coconut oil ($10 million), and marine products ($10 million). “Exporters are getting orders in the range of 30-40 % after the India-UAE free trade pact,” he said, adding that the impact would be known in the next six months.

Mr. Harilal said almost all districts in the State contributed to the export business to the UAE. If Kozhikode is exporting footwear, tea and spices are from Idukki, marine products are from Alappuzha and Ernakulam, coconut oil and gold ornaments are from Thrissur and Ernakulam, coffee is from Wayanad, cashew is from Kollam, and plywood is from Ernakulam. Garments are also exported to the UAE though some units are in Tirupur, Tamil Nadu, he added.

Every consignment, he said, should possess a certificate of origin to secure 100% exemption from customs duty in the UAE. The minimum value-addition for any imported product is 45%, while for gold, it is 3.5%.

Overall, the CEPA is expected to increase the total value of bilateral trade in goods to over $100 billion and trade in services to over $15 billion within five years.


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Printable version | Aug 12, 2022 12:59:38 am | https://www.thehindu.com/news/national/kerala/kerala-benefiting-from-duty-free-access-to-uae/article65576264.ece