Comprehensive Economic Partnership Agreement (CEPA) aims to boost bilateral trade and investments and increase trade to USD 100 billion in the coming years
A report by Deloitte has highlighted that Indian and UAE economies can benefit from the free trade agreement by sharing knowledge and best practices in several areas of mutual interest such as education, energy, skills and defence, reported PTI.
The report comes after the implementation of the Comprehensive Economic Partnership Agreement (CEPA) that took place in May this year. The agreement aims to boost bilateral trade and investments and increase trade to USD 100 billion in the coming years.
“Under the preferential trade agreement, the two economies may benefit from sharing knowledge and best practices in several areas of mutual interest,” the report said. The report goes on to point out that
the Indian economy has been heavily dependent on crude oil imports to meet its domestic requirements and the current geopolitical tensions between Russia and Ukraine and shrinking supplies from Iran were further affecting macroeconomic fundamentals. “These turbulences suggest that India must work towards decreasing its energy dependence by exploring alternative fuels and diversify its crude oil suppliers to ensure undisrupted supply,” it said.
On food security, the Deloitte report said, the UAE planned to invest USD 2 billion in the construction of food parks in India to maximise crop yields and in turn ensure its food security. It added that opportunities were high for the UAE to invest in India where seven mega parks for the pharmaceutical sector and medical devices were announced in 2020
The UAE has committed, according to the agreement, to meet India’s energy requirements at competitive rates. It has promised to assist the Indian economy in building strategic petroleum reserves; developing the upstream and downstream petroleum sectors; and conducting training and taking human resource development initiatives in the energy sector. “This will help India become more self-reliant in energy,” the report said. The agreement will also see increase in employment opportunities for the Indian workforce in the Gulf region and consequent contribution to India’s remittance earnings.
On food security, the Deloitte report said, the UAE planned to invest USD 2 billion in the construction of food parks in India to maximise crop yields and in turn ensure its food security. It added that opportunities were high for the UAE to invest in India where seven mega parks for the pharmaceutical sector and medical devices were announced in 2020.
Sectoral opportunities for the UAE businesses in India were there in chemicals, logistics, and infrastructure. There were sectoral opportunities for India, too in the UAE in oil and gas, textiles, healthcare, pharma, real estate, construction and gems and jewellery segments. “Tariff concessions offered to the UAE in gold will lower input costs, boosting exports to the UAE. Besides, India has competence in jewellery making and design; the two countries can gain from sharing their expertise and adding value in the field of gems and jewellery,” it added.
Jehil Thakkar, Partner, UAE Corridor Leader, Deloitte India, said the treaty’s success would depend on its effective implementation in both countries.
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