The Comprehensive Economic Partnership Agreement (CEPA) between India and the United Arab Emirates (UAE)
The Comprehensive Economic Partnership Agreement (CEPA) between India and the United Arab Emirates (UAE), effective from May 1, 2022, includes significant provisions for #tariff #exemptions aimed at enhancing bilateral trade. Under this agreement, the UAE has granted immediate #zero_duty_access to 90% of Indian exports, encompassing key sectors such as textiles, gems and jewellery, engineering goods, and pharmaceuticals.
Specifically, the agreement outlines the following tariff elimination schedules:
Immediate Tariff Elimination (TEI): Products such as petroleum oils, liquefied propane, and unsorted diamonds benefit from zero customs duties from the outset.
Tariff Reduction (TR): Certain goods, including specific categories of unwrought non-monetary gold and low-density polyethylene, will see a gradual reduction in customs duties over a period of up to 10 years.
Tariff Elimination Phased (TEP): Items like copper wire, base metals clad with gold, and specific iron or non-alloy steel products are set to achieve zero customs duties over a phased timeline of 5 to 10 years.
Conversely, India has committed to eliminating tariffs on approximately 65% of its tariff lines immediately upon the agreement’s implementation. This concession includes a tariff rate quota allowing the import of up to 200 tonnes of gold annually from the UAE with a one per cent reduction in import duties, phased over five years.
The CEPA also incorporates provisions for simplifying customs procedures and facilitating trade, aiming to expedite cross-border transactions and reduce regulatory burdens. Additionally, it establishes frameworks for cooperation in various sectors, including services and intellectual property rights, further strengthening economic ties between India and the UAE.
These tariff exemptions and related measures are designed to boost trade volumes, with both nations aiming to increase bilateral trade to $100 billion within five years, fostering economic growth and job creation.
Source – BL, PwC
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