From mangoes to automobiles, India’s free-trade pact with the United Arab Emirates will eliminate duties on 90% of the goods exported to the Gulf nation.
India-United Arab Emirates’ Comprehensive Economic Partnership Agreement will come into force from May 1. According to documents on the Commerce Ministry’s website, both countries have agreed to remove customs duties on goods originating in either India or the UAE in the next four years.
The CEPA, signed on Feb. 18, was ratified by the government of the UAE over the March 26-27 weekend.
The top items exported to UAE are mineral fuels, mineral oils and products of their distillation, natural or cultured pearls, precious or semiprecious stones, and electrical machinery and equipment, and parts thereof, sound recorders and reproducers, television image and sound recorders and reproducers , and parts.
The two countries have agreed on a comprehensive list of products for tariff reduction. Like the export duty on mangoes will be nil by the fifth year from the current effective rate of 30%.
The agreement will eliminate duties on 90% of India’s exports to the UAE covering sectors such as textiles, leather, engineering goods, footwear, sports goods, plastics, furniture, agricultural and wood products, medical devices, and automobiles, the ministry said.
There are exclusions though. Among prominent items excluded are jewelery with filigree work of silver, whether or not plated or clad with other precious metal; silver jewelery with gems; other articles of jewelery of metal clad with precious metal and parts of metal clad with precious metal. Gold jewelery, however, is not on the exclusion list.
Other exclusions include dairy items such as milk and cream, skimmed milk, yogurt, butter milk, curd, and lassi; meat and edible offal of chicken not cut into pieces, meat, and edible offal of ducks not cut into pieces, frozen, Indian white shrimp, lobsters live fresh or chilled, crabs live fresh or chilled.
India has offered tariff discounts on dates, petroleum products, petrochemicals, metals, among others.
The agreement prevents either country from nullifying or impairing any of the tariff concessions, except as provided in the agreement. It requires the either country to reduce duties further if India or the UAE reduces the most-favored nation applied rate of customs duty for any product to below the agreed duty rate in the CEPA.
All of these concessions will apply only on direct exports. Goods shipped via other countries or re-exported have been kept out of the agreement.
According to a statement by Commerce Ministry, the UAE has offered duty elimination on more than 97% of its tariff lines, approximating to 99% of Indian exports to the UAE by value.
India and the UAE will adopt any non-tariff measure on the import and export of goods, except in accordance with its WTO rights and obligations or with the free trade pact.
Any non-tariff measure seen as “an unnecessary obstacle to trade” can be escalated to the Committee on Trade in Goods, established under the agreement.
The trade document states that both countries need to designate a “contact point” within 30 days of the agreement coming into force to facilitate communications on any dispute.
In case of a dispute that does not get resolved via consultation, “the Party that sought consultations may request the establishment of a panel”.
The panel will comprise three members, who can neither be nationals of either of the countries nor their permanent residents.