There will be no more taxes on either country’s goods in the future, and the two countries will work to boost yearly commerce between them to $100 billion within five years with the signing of a comprehensive trade and investment agreement on Friday.
The Gulf state has just completed its first trade deal since September when it began pursuing such agreements to enhance its reputation as a commercial magnet.
During a virtual summit, Indian Prime Minister Narendra Modi and UAE de facto ruler Sheikh Mohammed bin Zayed Al Nahyan saw the signing by top officials from both nations. UAE and India are already big economic partners, after this deal, their economic relations will strengthen more.
Indian Foreign Minister S. Jaishankar described the signing of the agreement as a “milestone event in bilateral ties of both states,” according to the official Emirati news agency WAM.
Trade in non-oil goods is predicted to rise from $60 billion to $100 billion in the next three or five years because of the Comprehensive Economic Partnership Agreement (CEPA). An Emirati official told Reuters that “there would be a massive flow of commerce and investments between the two countries, and it will open the door for further economic prospects.”
According to Al Zeyoudi, the deal, which was not immediately made public, cuts taxes on UAE and Indian goods to the tune of 80%, with the goal of eliminating all tariffs within 10 years. According to him, the reduction of taxes on commodities like aluminium, copper, and petrochemicals will help the UAE economy.
Among the other aspects of the pact, is a promise by the United Arab Emirates to award 140,000 visas to highly trained Indian employees by 2030.
The UAE’s second-largest commercial partner is India, from whom over three million Indians working in the Gulf state annually send remittances totalling billions of dollars.
According to the United Arab Emirates’ economics ministry, by 2030, the CEPA would contribute $9 billion to the UAE GDP, exports will climb by $7.6 billion, and imports will rise by $14.8 billion.
The CEPA’s implementation is projected to take between 1.5 and 2 years.
UAE is also pursuing similar trade and investment agreements with other nations, such as Turkey and South Korea, while discussions with Israel and Indonesia are nearing completion on a bilateral basis.
Several legal and social reforms have been implemented in recent years to make life simpler for the country’s 10 million foreign residents.
Trade accords and policy pronouncements show that “we are strengthening from a regional to a global centre,” Al Zeyoudi remarked.