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Home›Made to Measure Tariff›CEPA: deciphering the India-UAE CEPA: can it provide the roadmap for $100 billion in trade over the next 5 years?

CEPA: deciphering the India-UAE CEPA: can it provide the roadmap for $100 billion in trade over the next 5 years?

By Guadalupe Luera
May 2, 2022
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The Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates was signed on February 18, 2022 and is India’s first comprehensive free trade agreement to be signed with any country in a decade. Negotiations between India and the UAE were concluded in a record 88 days and CEPA was implemented on May 1, 2022.

CEPA with the United Arab Emirates covers trade in goods, trade in services, rules of origin, technical barriers to trade, sanitary and phytosanitary measures, dispute settlement, movement of natural persons, telecommunications, customs procedures, pharmaceuticals, government procurement, IPRs, investment, digital trade and cooperation in other areas. It is supposed to act as a catalyst to strengthen economic ties between countries, which usually complement each other’s vision towards economic prosperity. Through this, both countries are expected to realize significant economic benefits in terms of access to quality education, liberalization of tariffs, ease of access to respective markets and ease of movement of labor. qualified to support these economic initiatives.

Under CEPA, India’s tariff commitments for trade in goods cover 11,908 items, while the UAE covers 7,581 items. India stands to benefit from the preferential market access provided by the UAE, covering over 97% of its tariff lines which account for 99% of India’s exports to the UAE in terms of value, especially for sectors such as stones precious and jewelry, textiles, leather, footwear, sporting goods, plastics, furniture, agricultural and wood products, engineered products, medical devices and automobiles. India will also provide preferential access to the UAE on over 90% of its tariff lines, including lines of export interest to the UAE.

India has provided market access to around 100 sub-sectors of the UAE with respect to trade in services. In comparison, Indian service providers will have access to around 111 UAE sub-sectors across 11 major service categories such as business services, communication services, construction and related engineering services, distribution, educational services, environmental services, financial services, health. related and social services, tourism and travel related services, recreational, cultural and sporting services and transport services.

The CEPA also focuses on digital commerce and provides that India and the United Arab Emirates endeavor to maintain a legal framework governing electronic transactions consistent with the UNCITRAL Model Law on Electronic Commerce (1996) and avoid any unnecessary burden on digital commerce, implying that India and the UAE will not adopt any authentication measures that would prohibit an electronic transaction and will not deny the validity of a digital signature, except in the circumstances provided for by its law.

CEPA specifies rules of origin and criteria of origin for obtaining a certificate of origin (COO) for goods to combat the misuse of CEPA, which states that such goods are deemed to originate in a country if wholly obtained or produced in the country. territory or has undergone sufficient working or production in accordance with the rules specific to the product. The COO must be issued before or within five working days of the date of export according to the format defined in CEPA, and this can also be issued retroactively. The COO is valid for twelve months from the date of issue. A paper COO in electronic or paper format or a fully digitized COO (electronic certificate) issued by a competent authority will be treated as a COO under CEPA. In addition, an origin declaration issued by an approved exporter may be considered a COO under CEPA.

CEPA also provides sanitary and phytosanitary measures to protect human, animal and plant life or health in India and the United Arab Emirates, to enhance communication, consultation and cooperation between the parties, and in particular between the competent authorities. parties, in order to prevent unjustified trade barriers, improve transparency and encourage the development and adoption of science-based international standards, guidelines and recommendations, and promote their implementation.

The Indian government is emphasizing export promotion in this agreement, and it should be a valuable tool in the hands of Indian industry to make inroads. The UAE is currently India’s third largest trading partner and second largest export destination after the United States. CEPA is expected to strengthen this strong commercial relationship between the two countries and could increase merchandise trade to $100 billion over the next five years, up from $29 billion in 2019-20. CEPA is also expected to generate 1 million jobs in multiple labor-intensive sectors, including gemstones and jewelry, textiles, leather, footwear, furniture, agricultural and food products, plastics, engineering products and pharmaceuticals, medical devices and sporting goods.

Krishna Barad is Partner and Abhishek Singhania, Director – Customs and International Trade, Indirect Tax, BDO India.

(The one-stop destination for MSMEs, ET RISE provides news, views and analysis on GST, exports, finance, policy and small business management.)

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