- February 20, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
Context- FTA to come into effect by early May, Indian goods to get duty-free access to UAE in 5 years.
India UAE Free Trade Agreement (FTA): The FTA will cover the following areas:
- Trade in goods and services
- Rules of Origin
- Customs procedures
- Government procurement
- Intellectual Property Rights
Important features of India- UAE FTA:
- Presently India-UAE trade [export ($26 B) + import ($34B)] is around $60 billion which is expected to touch $100 billion in the next five years.
- Both the countries have removed tariffs on 80% of products.
- The FTA will give zero duty access to 90% of India’s exports to UAE.
- The FTA includes robust rules of origin to protect both economies from misuse of the agreement by third countries, including a requirement of “melt and pour” for steel exports to qualify as domestically produced products from either country.
- The “melt and pour” rule of origin defines “the original location where the raw steel is: (A) First produced in a steel-making furnace in a liquid state; and then (B) Poured into its first solid shape.)
- The FTA also provides a permanent safeguard mechanism to protect businesses in both countries to prevent any unnecessary or unwarranted surge in volumes of (imports) any particular product.
INDIA- UAE Trade Relations:
- The United Arab Emirates is India’s third largest trading partner after China and USA, and second largest export destination after USA as per Economic Survey 2021.
- India’s major exports to the UAE include petroleum products, precious metals, stones, gems and jewellery, minerals, food items such as cereals, sugar, fruits and vegetables, tea, meat, and seafood, textiles, engineering and machinery products, and chemicals.
- India’s top imports from the UAE include petroleum and petroleum products, precious metals, stones, gems and jewellery, minerals, chemicals and wood and wood products.