H.E. Abdullah bin Touq Al Marri, Cabinet Member and UAE Minister of Economy, highlighted how the India-UAE Comprehensive Economic Partnership Agreement (CEPA) can assist India in achieving its objective of a 5-trillion-dollar economy, while also discussing the challenges and headwinds facing the world economy.
Al Marri elaborated on the significance of CEPA and the fact that this was the first time a GCC country had signed a CEPA with India. The Comprehensive Economic and Partnership Agreement (CEPA) is a bi-lateral free trade deal that includes negotiations on the trade of services and investments, as well as other sectors of economic partnership.
He added that prior to the signing of the CEPA with India, UAE trade was $50 billion; with the CEPA, he promised to increase trade to $100 billion in the next few years.
While talking about the India-UAE CEPA, he said that the agreement had 18 chapters and that the agreement was signed within 88 days, and would lay the groundwork for future business. He revealed that a CEPA was also signed between the UAE and two other countries, and they were ready to sign another one with the aim of reaching 26 CEPAs within the next seven years.
He gave an example of how a CEPA works. A country ‘A’ signs a CEPA with a country ‘B’ and adds value to the product that is being traded, it can access other markets and countries. For instance, if the UAE brings in steel lug nuts from India and transforms them into steel rebars, it does not get added to the original percentage of trade, but instead adds more value to the new percentage, which is given a free hand by the Harmonised System (HS) codes. After this process, UAE can re-trade it to other markets too.
He went on to speak about the number of opportunities that were brought about by the India-UAE CEPA. He said that he wants the UAE to hit at least $15 billion within the next 5 years after the CEPA with India. With the rule of law, economic growth, and prosperity giving a free hand, the UAE aims to hit a non-oil trade of $49.3 billion only with India.
Non-oil commerce between India and the UAE grew by 10% in 2021 and 2022, following a 26% increase in the previous year. There were around 1,900 weekly passenger and freight flights between the two countries.
\”We have a long-standing history together. We have common values. We have mutual respect, trust, and cooperation, which has never happened in the history of CEPAs or FTAs,\” said Mr. Al Marri. He also emphasised the point that the UAE wants to become a global trade hub and that India is one of the most vibrant economies. The UAE wants to help India become a $5 trillion economy and one of the top three economies in the world.
The UAE Minister of Economy then spoke about the economy of the UAE and how it is growing at a fast pace. The UAE hit about 2.2 trillion dirhams of trade the previous year, which has never happened in the 51 years of the country’s history. With 7.6% real GDP growth and 22 billion FDI inflows, the UAE is in the top 20 countries for attracting businesses there.
These observations were presented by the UAE Minister of Economy on the second day of the 7th annual The Economic Times, Global Business Conference in New Delhi.