PM lauds utilisation of India-UAE CEPA by Indian Exporters.

• India-UAE Comprehensive Economic Partnership Agreement (CEPA) is the first deep and full free trade Agreement (FTA) signed by India with any country in the past decade.
  • It officially entered into force in May 2022.
  • It covers Trade in Goods, Rules of Origin, Trade in Services, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures, Dispute Settlement etc.
  • India has already signed a CEPA with Japan and South Korea.

Significance of CEPA

• Expected to increase total value of bilateral trade in goods to over US$100 billion and trade in services to over US$ 15 billion within five years.
• Eliminated duties for 90% of India’s exports to UAE, covering sectors such as gems and jewellery, textiles, leather, etc.
• Exports benefiting from India-UAE free trade pact accounted for about 60% of India’s total non-oil shipments to UAE.

India- UAE relations

• UAE is India’s third largest trading partner after United States and China and second-largest export destination.
• UAE has highest number of Indian diasporas contributing high remittances to India.
• UAE’s Nayif-1 nanosatellite has successfully been launched into space by ISRO.

Type of Trade Agreements

Free Trade Agreement (FTA):

• A free trade agreement is an agreement in which two or more countries agree to provide preferential trade terms, tariff concession etc. to the partner country.
• India has negotiated FTA with many countries e.g. Sri Lanka and various trading blocs as well e.g. ASEAN.

Preferential Trade Agreement (PTA):

• In this type of agreement, two or more partners give preferential right of entry to certain products. This is done by reducing duties on an agreed number of tariff lines.
• Tariffs may even be reduced to zero for some products even in a PTA. India signed a PTA with Afghanistan.

Comprehensive Economic Partnership Agreement (CEPA):

• Partnership agreement or cooperation agreement are more comprehensive than an FTA.
• CEPA covers negotiation on the trade in services and investment, and other areas of economic partnership.
• India has signed CEPAs with UAE, South Korea and Japan.

Comprehensive Economic Cooperation Agreement (CECA):

• CECA generally covers negotiation on trade tariff and TRQ (Tariff Rate Quotas) rates only. It is not as comprehensive as CEPA. India has signed CECA with Malaysia.