India and the United Arab Emirates will sign the first ever bilateral Free Trade Agreement between the two countries on Friday.
The FTA — Comprehensive Economic Partnership Agreement (CEPA) — is expected to be in focus during a virtual summit between Prime Minister Narendra Modi and the Crown Prince of Abu Dhabi Sheikh Mohamed bin Zayed al Nahyan. A statement from the Ministry of External Affairs said the summit will provide both the leaders an opportunity to discuss "bilateral cooperation and exchange views on regional and international issues of mutual interest".
Minister of Commerce and Industry Piyush Goyal had announced last week that negotiations on the trade pact had neared conclusion and that it was to be signed soon.
India-UAE trade was expected to revert to pre-pandemic level this year and touch $60 billion in this financial year, an informed source said. Officials also noted that UAE was one of the foreign countries that had displayed interest in investing in the Union Territory of Jammu and Kashmir. Investment from the UAE has steadily grown and has reached $17 billion, which has provided a foundation for signing this biggest trade agreement of the last 7 years.
Sources said that India-UAE trade was no longer burdened by "legacy issues" like Emaar and Etisalat related controversies that disturbed trade ties between the two countries for some years earlier. In recent years, trade-related irritants have been dealt by the High Level Task Force which met last time in October 2021. The already vital energy ties between the two sides are expected to be boosted by the FTA. India has invited UAE's participation in strategic reserves. UAE is India's third largest supplier of crude oil and second largest supplier of LPG and LNG. Renewable energy is the next stop for bilateral energy ties.
The FTA has found enthusiastic support from the Gem and Jewellery Export Promotion Council (GJEPC) which has announced that the deal will push jewellery exports to the Gulf country to the level of $10 billion. The GJEPC said in a statement that the sector has already crossed ₹2.4 lakh crore, marking a post-pandemic recovery. "Among the top 10 gem and jewellery export destinations, UAE has witnessed the highest fall of 41.5% followed by Belgium 15.81%, Japan 12.20%, and Hong Kong 3.06% during April 2021 to January 2022 as compared to April 2019 to January 2020," said GJEPC in a statement.
"The FTA between India and the UAE has come at an opportune time when both countries are looking to rebound from the COVID-19 setback and recalibrate and realign their common business interests, including gold and diamonds. UAE is a gateway to the entire Middle East region and the proposed abolition of 5% import duty in UAE would lead to increased prosperity on both sides of the Arabian Sea," said Colin Shah, Chairman of GJEPC.
Safety of Indians
Bilateral ties in recent years has seen top level interactions as PM Modi and the Crown Prince of Abu Dhabi have interacted at a personal level on multiple occasions. This also helped India break into the OIC in the spring of 2019 when the late External Affairs Minister Sushma Swaraj addressed Foreign Ministers of the Organisation of Islamic Cooperation. Both sides are also in regular consultation on greater regional issues like Afghanistan and the advent of the Taliban in Kabul.
The safety and security of Indian nationals in the UAE is expected to feature during the high level talks on Friday as the country is facing greater threat from the Houthi fighters of Yemen. On January 17, two Indian nationals were killed in drone attacks claimed by the Houthis.