India, EBU to begin final round of negotiations for draft free trade deal

India and the EBU will begin their final round of negotiations on a draft free trade agreement on Monday, with the biggest challenge being for imports from third countries to be channeled to India via the Gulf country.

An official team from the United Arab Emirates will visit New Delhi for four days starting Monday for the third round of the Comprehensive Economic Partnership Agreement (CEPA) between India and the United Arab Emirates, and negotiations will be concluded at the end of the cycle, said a senior trade ministry official.

Officials said they were keeping a close watch on UAE trade items as India needed to protect its domestic industry. While the FTA would provide market access for Indian products, it should not lead to the dumping of products from other countries, especially China, by taking advantage of the treaty.

Commerce Ministry officials have said that to prevent misuse of FTA benefits and curb potential illegal entry of Chinese goods through a key transit hub like Dubai, India will insist on strict rules of origin. .

It can either stipulate an added value of 35% in the United Arab Emirates for all products eligible for the granting of customs duties under the FTA, or impose similar conditions on certain products for which it sees the maximum of. possibilities of abuse, they added.

They pointed out that the UAE has zero or very low tariffs on the majority of items and therefore it is easier for the Gulf country to enter into free trade agreements.

About 87 percent of products imported from the United Arab Emirates are currently taxed at 5 percent, while 11 percent are subject to zero duty. The rest see a higher incidence of tariffs or are on lists of prohibited or special goods, officials said.

Among items from India, the United Arab Emirates imposes a 5 percent tariff on textiles, clothing and jewelry, while some steel products are taxed at 10 percent.

Market access for services, including mutual recognition agreements, would also be crucial, officials said.

JNU’s trade economist Biswajit Dhar said, “The country should be wary of treaty buying because any nation keen to tap into the vast Indian market would look closely at the UAE. Negotiators should learn from the lessons of the United Arab Emirates. Asean FTA, which has been used by China and others to gain benefits to their advantage. ”

“The FTA with the United Arab Emirates should not be viewed from the sole prism of trade, as it has important strategic and geopolitical implications that the country would benefit from with the improvement of the trade and investment pact,” Dhar said.

India’s main exports to the UAE include petroleum products, precious metals, stones, gems and jewelry, textiles and clothing, food products, engineering products, and chemicals.

The FTA is expected to increase bilateral merchandise trade to $ 100 billion within five years of signing the pact, up from around $ 43 billion in 2020-2021. It also aims to more than double trade in services to $ 15 billion during this period.

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