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Strengthening of UAE- India Trade Relations with the Advent of CEPA

UAE and India have a strong trade and economic relations for a long time. There is a large volume of trade and commerce operations taking place between the two countries as part of Bilateral Trade Agreements that are in place.

UAE is one of the most preferred business investment destinations for Indian investors due to various reasons. Lower Taxation, the safety of the citizens, e-governance, improved lifestyle, business infrastructure, corporate banking network, etc. are a few benefits on the list.

With the Comprehensive Economic Partnership Agreement (CEPA) in place, the bilateral trade relations will furthermore strengthen and benefit the countries mutually on a larger scale. The UAE – India Comprehensive Economic Partnership Agreement (CEPA) came to effect on May 1, 2022.

This article will explain the details of the CEPA Agreement and the positive impact of the bilateral trade agreement for UAE and India based entrepreneurs and business investors.

CEPA is a bilateral trade agreement that will significantly boost both economies. It will help in exploring new business opportunities for companies operating in UAE as well as in India across various industry sectors.

uae india trade relations

There are numerous trade and economic reforms in place that CEPA will bring into both countries, There will be greater access for UAE exports entering the Indian market due to the reduction in tariffs for more than 80% of the products.

Similarly, the favorable cross-border trade with India will open up new business opportunities for traders and service providers in UAE. The UAE’s service providers operating across 11 major sectors will have enhanced market access in India. They will also be able to leverage the Indian government procurement opportunities and many more.

Boosting the UAE India Non-Oil Trade and Commerce

The CEPA is expected to accelerate the growth of annual bilateral non-oil trade to USD 100 billion in the next 5 years as per the Indian PM’s Office. India is the UAE’s second-largest trade partner, accounting for nine percent of the UAE’s total foreign trade and 13 percent of non-oil exports.

Elimination of UAE’s 5% import duty on products will effectively boost the local industries in India. For Indian Exporters, there are clear benefits for the labor-intensive sectors such as textiles, leather, footwear, sports goods, plastic, furniture, agriculture, medical devices, etc.

UAE India trade relations

India’s jewelry exporters are another sector that has benefitted from the CEPA Agreement. The duty-free access to the UAE for gold and precious metals is a boost to the sector’s export reach.

Sector-wise, future UAE investments in India are expected to target healthcare, infrastructure, agriculture, renewable energy, and more. Various memoranda of understanding (MoUs) have been signed between UAE and India under the CEPA Framework. A few of the notable ones include the Food Security Corridor initiative, investment in advanced technologies, initiatives for climate action and education, etc.

Indian Business Investments in UAE – Importance of Free Trade Zones

Indian Investors are already a major part of the business ecosystem in the UAE. The Free Trade Zones of UAE are the most preferred business investment choice for Indian Investors due to the ample benefits they offer.

Free Trade Zones in UAE are a major source of Foreign Direct Investment (FDI) from global investors. It is a vital part of the UAE’s Trade and Commerce ecosystem and contributes significantly to the business growth and GDP of the country.

Incorporating a company in the Free Trade Zones in UAE provides 100% foreign ownership, full profit repatriation, tax savings, no import duty, faster customs clearance, world-class office space and warehouse access, and more. There is a wide range of business activities the investor can choose from for their company.

Indian Business Investments in UAE

Companies operating in the Free Trade Zones are actively involved in trading, manufacturing, and service business in UAE. Trade Agreements such as the UAE-India Comprehensive Economic Partnership Agreement (CEPA) will benefit the numerous Indian companies operating in the Free Zones.

It will allow them to further expand their business in UAE as well as India by procuring goods and services from India or exporting their products made in UAE to India, etc. There will be new business opportunities arising for companies across both countries to collaborate and expand.

Company Incorporation in Free Zones – Role of a Business Consultant

Business Consultants offer Corporate Services and Business Advisory Services to global business investors who are aiming to start a company in the UAE. They play an important role in bringing foreign investment to UAE in the form of registering a new company and their subsequent business operations.

The Business Consultants connect foreign investors to the various Free Trade Zones in the country. They provide the right business support services and advisory solutions to global investors.

There are multiple parameters when it comes to setting up a company in UAE. Business Consultants will provide a suitable company package to the global investor after precisely understanding their business requirements.

With the introduction of more friendly foreign policies and Free-Trade Agreements such as the UAE-India CEPA. It paves the way for emerging business opportunities across industrial sectors in both countries for investors. Companies can easily expand to new geographies seamlessly with the advent of Trade policies such as CEPA and achieve business growth.

To know more about Incorporating a Company in UAE, connect with our expert team right away!

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