Free Trade Agreement (FTA) between India and UAE: Aims to double bilateral commerce from $60 billion to $100 billion
Maharashtra, the state that contributes the most to India's GDP, may gain from the Free Trade Agreement (FTA) between India and the United Arab Emirates (UAE).
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The FTA, which became effective on May 1, 2022, aims to double bilateral commerce between India and the UAE during the next five years, from $60 billion to $100 billion.
The FTA will enable larger investment flows between the two nations in addition to boosting commerce. Over $35 billion has already been invested in India by companies with headquarters in the UAE, with Maharashtra receiving the majority of these funds. The state's economic development will be boosted by the introduction of new technologies and commercial practises brought by this increased investment.
Strong commercial relations exist between India and the UAE, with non-oil commerce between the two countries valued at over $45 billion in 2021, up 60% from 2020 and 8% from 2019. With over 14% of the UAE's total international non-oil exports; India is also the UAE's largest trading partner for non-oil exports.
In the 22nd fiscal year, which ran from April to October, India's exports to the UAE increased by 17.6% to a little over $18 billion, according to figures from the ministry's Directorate General of Commercial Intelligence and Statistics. During the same time frame, imports from the UAE rose by 33% to $32.3 billion.
India's exports to the UAE increased by 17.6% to a little over $18 billion, according to figures from the ministry's Directorate General of Commercial Intelligence and Statistics.
By granting wider access to the UAE market for Maharashtra's goods and services, the FTA with the UAE has the potential to significantly accelerate Maharashtra's economic growth. These will include:
- As a result of the FTA's removal of tariffs, more Indian goods, especially those from Maharashtra, are anticipated to be exported to the UAE. Data from the Indian Department of Commerce shows that in the first year following the FTA's implementation, Maharashtra's exports to the UAE rose by 23%. This covers the export of commodities from important Maharashtrian industries like textiles, electronics, and engineering.
- The FTA will remove tariffs on a variety of products and services exchanged between India and the UAE, making it simpler and more affordable for enterprises in Maharashtra to export to the UAE. The FTA will do away with duties on items like textiles, electronics, and engineering that Maharashtra exports in large quantities to the UAE. As the UAE is a sizable market for Indian goods, this will make it simpler for Maharashtra's textile producers, electronics manufacturers, and engineering enterprises to sell their goods there.
- The FTA will give Indian and UAE businesses the chance to collaborate and exchange ideas, which may result in the sharing of expertise and technology. Enterprises from India and the UAE may work together on research and development initiatives, or Indian enterprises may have access to cutting-edge technologies created by UAE companies. This can assist Indian businesses, especially those in Maharashtra, in enhancing their goods and services and maintaining their competitiveness on the international market.
- The FTA will make doing business in Maharashtra simpler for UAE firms, which is anticipated to draw foreign investment to the region. The manufacturing, service, and agricultural sectors in Maharashtra could attract UAE-based businesses to invest, which might boost employment prospects and economic growth.
- Maharashtra's agricultural products will have easier access to the UAE market, a significant market for Indian agricultural exports. This could strengthen the state's agriculture industry, which contributes significantly to the state's economy. Grain, vegetables, and fruits, which make up a significant portion of Maharashtra's exports to the UAE, would no longer be subject to duties thanks to the FTA. Farmers in Maharashtra will find it simpler to sell their goods in the UAE as a result, which will raise their income and increase the viability of their farms.
Increased trade and investment between India and the UAE have been made possible by the India-UAE Free Trade Agreement (FTA), particularly in industries like oil and gas, diamonds, precious stones and pearls, equipment and mechanical appliances, and textiles. Along with greater travel and migration, it has also strengthened social and cultural ties.
Strong commercial relations exist between India and the UAE, with non-oil commerce between the two countries valued at over $45 billion in 2021, up 60% from 2020 and 8% from 2019
Through greater trade and investment with the UAE, the India-UAE FTA has the potential to considerably strengthen Maharashtra's economy. Additionally, it will advance the two nations' existing significant cooperation and capitalize on their common objective of leveraging trade as an engine for prosperity and economic growth.
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