Abu Dhabi, (Business News Report)|| The UAE and India have announced the signing of a trade agreement that contributes to reducing customs duties and raising the annual trade volume.
The signing ceremony of the trade agreement was attended by Indian Prime Minister Narendra Modi and Abu Dhabi Crown Prince Mohammed bin Zayed Al Nahyan, during a virtual summit between the two leaders.
The trade agreement is scheduled to increase the volume of trade exchange between the two countries to $100 billion within five years.
Piyush Goyal, India’s Commerce Minister told reporters that the deal could create more than one million jobs for India in the next few years, especially in labour-intensive sectors such as the automotive, plastic, leather and engineering industries.
The Indian minister added that the agreement is expected to enter into force by May, after approval by the UAE Cabinet.
“The agreement… not only deepens our economic and trading relationship with a close partner but unlocks a new phase of global cooperation for us,” Mohammed bin Zayed said in a joint statement.
The Indian Prime Minister’s Office confirmed that the comprehensive economic partnership agreement is expected to increase the volume of trade exchange to $100 billion, within three to five years, up from the current level of $60 billion.
“There will be a huge flow of trade and investments between both nations and it’s going to open the door for more business opportunities,” Emirati Minister State for Foreign Trade Thani Al Zeyoudi told Reuters.
Customs duties
Al-Zeyoudi added that the agreement, which was not announced immediately, cancels 80% of customs duties on Emirati and Indian goods, and that all fees and tariffs will be canceled within ten years.
He explained that UAE commodities such as aluminum, copper and petrochemicals will benefit from the abolition of customs duties.
The agreement also covers the services, investments and intellectual property sectors, in addition to the UAE’s commitment to grant 140,000 work visas to skilled workers from India by 2030.
India is the second largest trading partner of the UAE. The annual remittances sent by more than three million Indians working in the UAE are estimated in billions.
The UAE Ministry of Economy said that by 2030, the agreement will add $9 billion, or 1.7 percent, to the country’s gross domestic product, and that exports will increase by $7.6 billion, or 1.5 percent, while imports will rise by $14.8 billion, or 3.8 percent.
