India and UAE have signed historic Comprehensive Economic Partnership Agreement (CEPA).
The deal was signed during the virtual summit between Prime Minister of India, Narendra Modi and Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi.
Union Textiles, Commerce and Industry Minister Piyush Goyal and UAE Minister of Economy Abdulla bin Touq Al Marri signed the agreement in Delhi.
This is India’s first comprehensive trade agreement in a decade.
The CEPA or Free Trade Agreement (FTA) will unleash the infinite potential that both nations hold and it will have huge impetus to several sectors, including textiles.
Piyush Goyal said that this balanced, fair and equitable trade agreement has been built on the three pillars of trust, transparency and talent. “Both nations are entering a golden era of economic and trade cooperation with the signing of India-UAE CEPA,” he said.
As per Indian Government, benefits of this agreement to textile sector shall be by additional increase in exports projected at US $ 2 billion over next 5 years. Notably, duty-free exports over next 5 years projected at US $ 650 million/year for Man Made Fibre.
Indian textile and apparel industry is also going to benefit through this initiative as now India will not face 5 per cent duty on textiles and garments, which will be a big advantage for Indian companies.
In 2018-19, India exported knitted garments of US $ 1,159.74 million, while the same was US $ 1,030.36 million in 2019-20 (-11.16). In woven category also, there was fall of 21 per cent. In 2018-19 and 2019-20, India exported woven apparel worth US $ 831.41million and US $ 655.65 million, respectively, to UAE (-21.14).
India’s total apparel export to UAE was US $ 1,609.4 million in 2020-21 (HS code 61, 62 combine) and US $ 1,436.64 million in 9 months of 2021-22.
The export of home textile in the UAE market – the third largest market in the category for India – valued US $ 259.14 million, noting 32.46 per cent Y-o-Y growth.
It is also pertinent to mention here that various reports have claimed that overall India eyes US $ 100 billion investment after FTA with UAE. The United Arab Emirates is India’s third largest trade partner globally.
The 880-page deal was negotiated in just 88 days. The deal also features a permanent safety mechanism to protect domestic businesses in both nations against sudden surges in trading volumes.
Historic #IndiaUAECEPA Deal Signed! 🤝
Big boost to:
💎 Gems & Jewellery Sector
🧵 Textiles Sector
💊 Pharmaceutical & Medical Devices
⚙️ Engineering ProductsCEPA will contribute towards large scale employment generation & business expansion in both countries.
🇮🇳🇦🇪 pic.twitter.com/26FYnzJobg— Piyush Goyal (@PiyushGoyal) February 18, 2022
