GS Paper 2:
Topics Covered: India and neighbourhood relations.
Context:
India and the United Arab Emirates have signed a Comprehensive Economic Partnership Agreement (CEPA).
What is CEPA and how is it different from FTA?
It is a kind of free trade pact which covers negotiation on the trade in services and investment, and other areas of economic partnership.
- It may even consider negotiation on areas such as trade facilitation and customs cooperation, competition, and Intellectual Property Rights.
- Partnership agreements or cooperation agreements are more comprehensive than Free Trade Agreements.
- CEPA also looks into the regulatory aspect of trade and encompasses an agreement covering the regulatory issues.
As per the CEPA signed between India and the UAE:
90% of India’s exports will have duty-free access to the Emirates.
It covers goods, services and digital trade.
Benefits:
- The bilateral trade pact is India’s first in the region and the first comprehensive trade agreement with any country in a decade.
- The CEPA is likely to benefit about $26 billion worth of Indian products that are currently subjected to 5% import duty by the UAE, India’s third-biggest trading partner behind the US and China.
- It is expected that the CEPA will lead to an increase in bilateral trade from the current $60 bn to $100 bn in the next 5 years.
- Through the pact, Indian exporters will also get access to the much larger Arab and African markets.
Insta Curious:
Did you know that India was the UAE’s largest export destination and second-largest trade partner in 2019 and the eighth biggest investor with a cumulative foreign direct investment of nearly $11 billion so far?
InstaLinks:
Prelims Link:
- About CECA.
- About CEPA.
- India’s FTAs with other countries.
Mains Link:
Discuss the significance of India- Australia CECA.
Sources: Indian Express.