India-UAE CEPA is a trendsetter for inking economic pacts with other countries: SK Narvar, Capital India Corp
While India and UAE have had long-standing diplomatic relations since 1972, in 2015, under the leadership of PM Narendra Modi, both countries entered into a stronger strategic partnership. The relationship between New Delhi and Abu Dhabi has grown stronger ever since.
The India and UAE CEPA is the first in a series of pacts that the Government is looking forward to signing with other countries. In the age of new trade blocs, PM Modi’s masterstroke is to reaffirm India’s economic leadership in Asia, says S K Narvar, Chairman, Capital India Corp.
Below are the excerpts of detailed conversation with the Capital India Corp chairman:
Ques: What is your assessment of India and UAE CEPA?
S K Narvar: The Comprehensive Economic Partnership Agreement (CEPA) between India and UAE is a win-win situation for both countries on the economic front. While it will benefit the trade of Indian goods worth $26 billion, UAE gains a 1% advantage in gold bars, possibly making it bigger than Zurich, which presently accounts for 50% of India’s gold imports.
The trade agreement opens new frontiers for us, and the pact is the beginning of a different policy and new positioning of India in the rapidly changing socio-economic order.
Ques: How does the CEPA take India and UAE relationship forward?
S K Narvar: While India and UAE have had long-standing diplomatic relations since 1972, in 2015, under the leadership of PM Narendra Modi, both countries entered into a stronger strategic partnership. The relationship between New Delhi and Abu Dhabi has grown stronger ever since.
Both countries would depend upon strong relations for both economic and geopolitical advantage. India is one of the biggest markets for UAE’s diamond, gold, and crude oil. At the same time, India’s growing energy demand needs UAE support and our geopolitical considerations warrants a strong ally in the Middle East.
Moreover, both countries would need to script economic recovery in post-pandemic world dynamics, and this trade agreement will become essential to achieve that. UAE has been our third most significant trading partner, and this pact further strengthens our relationship.
Ques: What would be the agreement’s impact on India’s economic recovery and growth?
SK Narvar: CEPA will play a significant role in boosting India’s economic recovery and growth. Over 90% of Indian products exported to the UAE will not incur import tax, which is a big boost to Indian industries, especially the MSMEs. The Arab country will become an entry point for Indian goods to the Middle East and African market.
Furthermore, these sectors are labor-intensive; therefore, they will generate lakhs of employment. Stronger relations with the UAE would reflect on the Organisation for Economic Co-operation and Development countries and GCC (Gulf Cooperation Council) nations.
India can further work to strengthen its trade network with these nations. Furthermore, this pact affirms the Indian position on free trade agreements. It can make way for more vital bilateral trade agreements with countries like the UK, the EU, Australia, Canada, Israel, and some GCC nations.
Ques: In the light of India’s changing economic policies, how significant is the signing of CEPA for India?
SK Narvar: The successful signing of CEPA is an important step for India to position itself as a reliable and robust trading partner to global economies. The India and UAE CEPA is the first in a series of pacts that the Government is looking forward to signing with other countries.
In the age of new trade blocs, it is a strategic way to reaffirm India’s economic leadership in Asia. The next step for India is to sign bilateral FTAs with as many trading partners as possible. In the mid-term, we also should explore having multilateral partnerships of the same kind.
Ques: What are the key takeaways from the agreement?
SK Narvar: There are several takeaways from the agreement, but some of the important ones include the two-way commerce reaching $100 billion. It has the potential to generate 10 lakh jobs in labor incentive sectors like textile, jewelry, handloom, etc. But most importantly, in the changing socioeconomic order under PM Modi’s leadership, India has created its position in fostering bilateral trade relations.
It is a strategic advantage for us, and we need to continue consolidating upon the step. The India UAE CEPA is a trendsetter pact for us as we sign similar agreements with other economies.