One year of India-UAE CEPA


    In News

    • Recently, India and UAE commemorated the one year of signing of the Comprehensive Economic Partnership Agreement for boosting bilateral trade.


    • India and UAE signed the landmark Comprehensive Economic Partnership Agreement (CEPA) on February 18, 2022.
    • Recently, a special business event was organized by the Federation of Indian Chambers of Commerce & Industry (FICCI) in Dubai to celebrate the first year of CEPA signing.
    • The CEPA has already started to yield results, with bilateral trade in goods expected to reach USD 100 billion and services to increase to USD 15 billion within five years.
    • Previously, India has signed CEPAa with Singapore (2005), South Korea, Japan, Malaysia, ASEAN (2011), Sri Lanka, Thailand, Mauritius and Indonesia.
    • India is also negotiating CEPAs with several other countries, including Australia, Canada, the European Union, and New Zealand.


    • It is the first bilateral agreement signed by India in the Middle East/North Africa (MENA) region.
    • It covers a variety of topics, including commerce, investments, healthcare, digital trade, government procurement, and IPR.
    • The CEPA aims to enhance not only commercial and trade relations but also people-to-people contacts, given that the UAE has one of the largest Indian diasporas.
    • The historic India-UAE Comprehensive Economic Partnership Agreement (CEPA) officially entered into force on 1st May, 2022.

    Key features of CEPA

    • Greater access for UAE exports entering the Indian market through the reduction or removal of tariffs on more than 80 per cent of products.
    • An open and non-discriminatory environment for cross-border trade with India.
    • Enhanced market access for UAE’s service providers across 11 sectors and more than 100 sub-sectors.
    • The removal of unnecessary technical barriers (TBT) for UAE and Indian exporters.
    • The use of international standards as a basis for technical regulations.
    • Enhanced access for UAE businesses to Indian government procurement opportunities.
    • Support for UAE companies through a 10 per cent price preference in UAE government procurement tenders. 
    • Assurance that UAE products will not be subject to India’s anti-dumping investigations as such products are merely trans-shipped.
    • A Joint Committee to assess, revise and propose amendments to the CEPA, including improving market access.

    Impact of CEPA:

    • Bilateral trade between India and the UAE increased significantly in the current fiscal year.
    • Trade in goods valued at USD 57.8 billion, up 27.5% YoY.
    • The CEPA is helping business groups in an exceptional manner, and business houses are the pillars of the success of the CEPA agreement
    • After CEPA, many Indian big business giants are expanding their operations in the UAE, and more investments are expected from both sides
    • During the same period, India’s exports to the UAE grew remarkably by 19.32%, reaching $20.8 billion from $17.45 billion, an increase of $3.35 billion in value terms.
    • CEPA has enabled easier sourcing of jewelry from India and selling to other countries

    Importance of UAE:

    • Economic Ties: The UAE is India’s third-largest trading partner after China and the United States, CEPA is expected to boost bilateral trade in goods and services in the next five years.
    • Investment Opportunities: The UAE is an attractive destination for Indian businesses and investors due to its strategic location, world-class infrastructure, and ease of doing business. Indian Diaspora: The UAE has a large Indian diaspora, which is estimated to be around 3.5 million which can serve as a bridge between the two countries.
    • Strategic Partnership: India and the UAE have a strategic partnership that covers various sectors, including defense, security, energy, technology etc., and thus the two countries can work closely on regional and global issues such as terrorism, climate change, and trade.
    • Cultural Ties: Both countries share historical and cultural long-standing relationship that dates back to several centuries making UAE a natural partner of India in the Mediterranian region. 


    • UAE is an important country for India due to its economic ties, investment opportunities, Indian diaspora, strategic partnership, and cultural ties. 
    • CEPA has unleashed new opportunities in bilateral trade, and both India and UAE have started leveraging the duty waivers and enhanced market access offered under the agreement
    • With both countries having a strong and growing relationship, CEPA is expected to benefit both nations in the years to come.

    Source: AIR