India’s trade venture into the Middle East

India and the UAE inked the Comprehensive Economic Partnership Agreement (CEPA) in February 2022 after just 88 days of discussions. This is India's first comprehensive free trade agreement in the last ten years, which may be a reflection of the significance of the parties' trade relationship (the UAE will be India's third-largest trading partner in 2021). Other agreements, notably with the UK, Australia, and the EU, are on the horizon.

 There are several reasons why the CEPA is important. Within the next five years, it is anticipated to increase bilateral trade from $60 billion to $100 billion, creating 1 million new jobs in India. Greater economic ties with the UAE could pave the way for stronger ties between India and other Gulf nations, with whom India has recently seen its bilateral commerce grow at an exponential rate. A trade agreement will enhance investment and trade between the two regions.

 The agreement addresses a broad range of issues of shared interest, including free trade and the digital economy. It comes with certain safeguards to protect domestic manufacturers as well as rules of origin restrictions.
 In accordance with the CEPA, the UAE is expected to reduce taxes on 97% of the tariff lines that account for 99% of India's exports to the UAE in terms of value, including the immediate elimination of tariffs on 81% of lines.

The CEPA guarantees 11 industries, including telecommunications, tourism, banking, and construction, open and non-discriminatory access to trade in services. Increased access will help UAE service sector businesses aiming to grow to India and sell services abroad, in addition to improving access for Indians to 111 sub sectors of business and professional services.
India and the UAE want to improve their partnership in digital trade, including paperless transactions, electronic payments, online consumer protection, and the protection of personal data, through the CEPA. Both nations will make an effort to enact or uphold a legislative framework for the protection of users' personal data in digital trade.