A comprehensive economic partnerships agreement(CEPA) is an international trade treaty between India and UAE, signed on 18, February 2022, on conditions for products and services between countries that result from collective bargaining.
Trade agreements formalize arrangements between countries for trade and economic intersection and outline the terms and conditions under which goods and services can be exchanged. They also aimed to promote trade and investment by providing a transparent and predictable framework for business transactions. These agreements also often reduced barriers such as traffic and quotas, and they established mechanisms for resolving disputes.
Type of International Trade Agreement
- Preferential Trade Agreement (PTA)
- Multilateral Trade Agreements and
- Bilateral Trade Agreement.
- Free Trade Agreement(FTA)
Recent Global Trade Agreement
- Comprehensive Economic Partnership Agreement (CEPA)
CEPA is a trade agreement between The Republic of India and The United Arab Emirates (UAE), signed on 18 February 2022. The trade Agreement came into force on 1 May 2022.
Brief about CEPA and its benefits
- Greater access for UAE exports entering the Indian market.
- This agreement is a trendsetter because of the short time of 88 days in which it was negotiated and concluded.
- Reduction or removal of tariffs on more than 80 percent of products.
- The CEPA provides benefits such as simple customs procedures, transparency in customs procedures, and trade facilitation.
- The CEPA establishes rules of origin to ensure that only gods produced in India or the UAE qualify for preferential tariff treatment. These rules manded 40 percent value addition or substantial processing of up to 40 percent on export items, and a certificate of origin issued by the UAE Ministry of Economy.
- UAE products are prevented from being subject to India; ‘s antidumping investigations in cases wherein the products are trans-shipped.
- Duty-free market access for labor-intensive sectors like gems, jewelry, textiles, leather, footwear, sports goods, plastics, furniture, agricultural products, engineering products, pharmaceuticals, medical devices, and automobiles.
Impact of CEPA
- UAE-based Lulu Group plans to invest $750 million in India over the next five years, with a focus on expanding its retail and food processing business.
- Indian pharmaceutical company Cipla plans to set up a new manufacturing facility in the UAE to cater to the growing demand for its product in the region.
- Indian IT company Infosys plans to hire 1000 new employees in the UAE to support its growing business in the region.
- Bilateral trade between India and the UAE reached historic highs during the Financial year 2022-23 (1 April 2022- 31 March 2023); increasing from USD72.9 billion to USD 84.5 billion, registering an increase of 16 percent.
- Indian exports to UAE increased from USD28 billion in the financial year 2022 to USD31.3 billion in the financial year 2023 an increase of 11.8 percent.
- During the CEPA Implementation period (May 22- March 23 ), India’s exports to the UAE increased from 26.2 billion (May 21- March 22); an 8.5 percent year-on-year growth.
- The UAE eliminated duties on 97.4 percent of its tariff lines corresponding to 99 of imports from India. India has obtained immediate duty elimination on over 80 percent of its tariff lines corresponding to 90 percent of India’s exports in value terms.
- Most of these tariff lines correspond to labor-intensive industries/sectors such as oil seeds & oils, beverages, cotton, fish &fish products, textiles, clothing, gems and jewelry, leather, footwear, pharmaceuticals, and many engineering products.
The Comprehensive Economic Cooperation and Partnership Agreement
The Comprehensive Economic Cooperation and Partnership Agreement is a bilateral treaty between India and Mauritius signed on Feburary22 2021. This treaty came into force on April 1 2021.
Briefe about Comprehensive Economic Cooperation and Partnership Agreement and its Benefits(CECPA)
- The CECPA is India’s first trade agreement with an African country.
- The agreement allows trading partners to cut or eliminate customs duties on many products.
- It also liberalizes norms to promote services trade.
- The agreement also covers various other areas of economic cooperation, such as customs procedures, trade facilitation, sanitary and phytosanitary measures, technical barriers to trade, and capacity building.
- The CECPA includes provisions aimed at promoting and protecting investments between India and Mauritius.
- India benefiting from reduced duties and taxes for nearly 320 0f Indian products for the Mauritian market.
Impact of Comprehensive Economic Cooperation and Partnership Agreement(CEPA)
- Mauritius will have preferential access to India’s market and will be allowed to export 40000 tons of sugar, 7.5 million pieces of apparel, 1.5 million liters of rum, and 2 million liters of beer per year.
- With over 70 percent of the 1.2 million people living on the island being of Indian descent, there is a shared heritage that strengthens the relationship.
- India will allow Mauritius access to 95 sub-sectors of its 11 broad service sectors.
- Mauritius has emerged as a significant source of foreign direct investment (FDI) in India. in 2021-22, FDI inflows from Mauritius stood at around $9.39 billion.
- In the year 2021-22, the total trade between India and Mauritius amounted to $786.72 million, with significant growth witnessed over the past 15 years.
- The Agreement provides Mauritian export preferential market access on a list of 615 products including 4000 tonnes of special sugar at 10 percent duty, 2 million liters of beer at 25 percent duty, 1.5 million liters of rum at 50% duty, 5000 liters of fruit win at 50% duty, 7.5 million pieces of garments at zero duty, 7000 tons of canned tuna at zero duty.
- India has emerged as Mauritius’s largest trading partner, taking on the role of the primary exporter of goods and services to the island nation in the Indian Ocean since 2007.
Economic Cooperation Agreement(ECA)
The Economic Cooperation Agreement is a bilateral trade Agreement between India and Finland signed in March 2010.
Brief about the Economic Cooperation Agreement and its benefits
- Bilateral Trade; Agreement aimed to boost trade and investment.
- Focus sector; Tec, clean tech, energy ICT
- Investment; Encourage mutual investment.
- Innovation and Research; Collaboration in these areas.
- DTAA; Double Taxation Avoidance Agreement discussed,
- Working Groups; Joint groups for sectorial cooperation.
- IPR; Enhanced protection and enforcement.
