To protect sensitive sectors, India has kept certain segments out of the ambit of this agreement. These include dairy, fruits, vegetables, cereals, tea, coffee, sugar, food preparation, tobacco, petroleum waxes, coke, dyes, soaps, natural rubber, tyres, footwear, processed marbles, toys, plastics, scrap of aluminium and copper, medical devices, TV pictures, auto and auto components and sectors under the PLI scheme.
India and the UAE on Friday signed a comprehensive economic partnership agreement (CEPA), under which a number of domestic goods will get zero duty access to the UAE market. The pact may come into force in April or May.
Subrahmanyam also said the domestic jewellery sector would get an export boost as it would get duty free access there. The gold market here as India would give duty concessions on import of up to 200 tonnes.
India has agreed to concessional import duties on gold imports of up to 200 tonnes per year. The country imported about 70 tonnes of gold from the UAE in FY21.
“We are a major importer of gold. India imports about 800 tonnes of gold every year. In this particular agreement, we have given them (UAE) a TRQ (tariff rate quota) of 200 tonnes where the tariff (or import duty) in perpetuity will be 1% less than whatever is the tariff charged for the rest of the world,” the secretary said in a briefing.
“Therefore, the UAE has a 1% price advantage in gold bars. That 1% tariff difference means those 200 tonnes will be diverted to the UAE,” he said, adding that the biggest gain for India is “that we get zero duty access” to the UAE market for domestic jewellery.
There was a 5% duty on jewellery and now “it’s gone to zero” so the gem and jewellery sector is “gung-ho”, according to Subrahmanyam. TRQ is a quota for a volume of imports that can enter a country at specified tariffs. After the quota is reached, a higher tariff applies on additional imports. TRQ would also be there for copper, polyethylene and polypropylene in India-UAE CEPA.
Digital trade
The agreement also has a chapter on digital trade which, the secretary said, has been included for the first time in a trade agreement signed by India and it shows that India is ready to talk on this bilaterally.
“There will be a lot of harmonisation in regulatory standards on how you manage digital trade between India and UAE… We (India) are discussing digital trade or e-commerce with the EU Australia, the UK and Canada,” he said.