India, UAE sign deal with aim to increase annual trade to $135b
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NEW DELHI • India and the United Arab Emirates (UAE) have signed a broad trade and investment pact that will eventually cut all tariffs on each other's goods and aims to increase annual trade between the two nations to US$100 billion (S$135 billion) within five years.
The virtual signing ceremony on Friday marked the first trade deal sealed by the Gulf state since it began pursuing such pacts last September in a bid to strengthen its status as a business hub.
Mr Piyush Goyal, India's Commerce Minister, told reporters the deal could create more than a million jobs for India in the next few years, particularly in labour intensive sectors such as the auto industry, plastics and engineering.
Earlier, India's Prime Minister Narendra Modi and UAE de facto ruler Sheikh Mohamed bin Zayed Al Nahyan witnessed the signing by senior officials from both nations, already major trade partners, during a virtual summit between the leaders.
"The agreement… not only deepens our economic and trading relationship with a close partner, but also unlocks a new phase of global cooperation for us," Mr Sheikh Mohamed said in a joint statement.
The Comprehensive Economic Partnership Agreement, as it is known, is expected to boost annual bilateral non-oil trade from US$60 billion to US$100 billion within the next three to five years, India's Prime Minister's office said.
UAE's Minister of Economy Abdulla bin Touq Al Marri told The Economic Times that for the first time, companies will be allowed to access the government procurement process of both countries.
The agreement eliminates 80 per cent of tariffs on UAE and India goods, while all tariffs are to be removed within 10 years, Emirati Minister State for Foreign Trade Thani Al Zeyoudi told Reuters.
India is the second largest trading partner of the UAE. The UAE is pursuing similar trade and investment deals with nations including Turkey and South Korea, and expects to finalise bilateral negotiations with Israel and Indonesia soon.
REUTERS