India-UAE CEPA

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13 Jun India-UAE CEPA

Posted at 13 Jun 2023 in Current Affairs, Daily Current Affairs for UPSC by
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India-UAE CEPA

This article covers “Daily Current Affairs” and the topic details “India-UAE CEPA”. The topic “India-UAE CEPA” has relevance in the Governance section for the UPSC CSE exam.

Relevance of the topic “India-UAE CEPA”:

For Prelims:
What is CEPA?
What is India-UAE CEPA

For Mains:
GS 2: Governance
What is the trade status of India and UAE?
What is the significance of India-UAE CEPA?
Way forward 

Why in the news?

The first meeting of the Joint Committee of the India-UAE Comprehensive Economic Partnership Agreement heralds a new era of bilateral cooperation.

During this meeting, both sides came together to discuss and negotiate various aspects of the agreement, aiming to reach mutually beneficial outcomes. 

What is CEPA?

A Comprehensive Economic Partnership Agreement, or CEPA, is a special kind of trade agreement between two countries that aims to strengthen their economic cooperation.

It goes beyond just reducing tariffs and barriers to trade by covering a wide range of areas, such as trade in goods and services, investment, intellectual property rights, and competition policy. 

Basically, it’s a way for countries to work together more closely on economic matters and create more opportunities for businesses.

What is India-UAE CEPA?

The case of the India-UAE CEPA, it’s a significant agreement that holds great potential for both countries. By entering into this partnership, India and the United Arab Emirates are taking a big step towards deepening their economic ties and fostering closer collaboration. 

They are looking to remove obstacles that hinder trade and investment and to create a more favorable environment for businesses from both nations to thrive. 

The CEPA aims to promote and facilitate:

  1. Trade in goods and services,
  2. Boost investment flows, 
  3. Protect intellectual property rights, 
  4. Improve market access for businesses from both India and the UAE.
  5. Closer collaboration in sectors such as agriculture, textiles, manufacturing, information technology, finance, and tourism. 

What is the trade status of India and UAE?

  • Bilateral trade:
      • The bilateral trade between India and the UAE is on an upward trajectory after the signing of CEPA.
      • With modest trade starting at USD 180 million per annum in the 1970s it has crossed US$ 80 billion today.
      • After the signing of the CEPA, the trade has increased from US$ 72.9 billion to US$ 84.5 billion by the month of March 2023.
      • UAE is India’s third-largest trading partner.
  • Exports:
      • UAE is the second-largest export destination for India. 
  • FDI: 
    • UAE is eighth in terms of foreign direct investment (FDI).

What is the significance of India-UAE CEPA?

  • Tariff Reduction: There is greater access for UAE exports to enter the Indian markets through the reduction or removal of tariffs on more than 80 percent of products.
  • Non-Discriminatory Environment: An open and non-discriminatory environment for cross-border trade with India, ensuring fair treatment for UAE businesses.
  • Expanded Market Access for Services: Enhanced market access for UAE service providers across 11 sectors and more than 100 sub-sectors, promoting collaboration and investment in service industries.
  • Addressing Technical Barriers: The removal of unnecessary technical barriers (TBT) for UAE and Indian exporters, facilitating smoother trade procedures and compliance with international standards.
  • International Standards: The use of international standards as the basis for technical regulations, promoting harmonization and reducing trade barriers.
  • Government Procurement Opportunities: Enhanced access for UAE businesses to Indian government procurement opportunities, enabling participation in government tenders and projects.
  • Price Preference in UAE Government Procurement: Support for UAE companies through a 10 percent price preference in UAE government procurement tenders, providing competitive advantages.
  • Exemption from Anti-dumping Investigations: Assurance that UAE products will not be subject to India’s anti-dumping investigations as transshipped goods, ensuring fair treatment for UAE exporters.
  • Joint Committee for Continuous Improvement: Establishment of a Joint Committee to assess, revise, and propose amendments to the CEPA, including improving market access and addressing any emerging trade issues.

Source:

https://www.pib.gov.in/PressReleseDetail.aspx?PRID=1931759

https://www.moec.gov.ae/en/cepa_india

PRELIMS QUESTIONS

Q.1 Which of the following are the emirates in the UAE:

  1. Ras Al Khaimah
  2. Sharjah
  3. Dubai
  4. Riyadh

Select the correct answer from the code given below:

  1.  1 only
  2.  2 and 3 only
  3.  1, 2, and 3 only
  4.  None of the above

Answer: (c)

Q.2 Arrange the following trade agreements in the increasing order of trade integration: 

  1. Free Trade Agreement
  2. Comprehensive Economic Partnership Agreement
  3. Customs Union
  4. Economic Union

Select the correct answer from the code given below:

  1.  1->3->2->4
  2.  2->3->1->4
  3.  4->3->2->1
  4.  3->1->2->4

Answer: (a)

Mains Question

  1. Discuss the significance of India-UAE CEPA and the associated challenges.
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