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India and United Arab Emirates (UAE) on Wednesday formally launched negotiations for a Comprehensive Economic Partnership Agreement (CEPA) with an early harvest to be concluded by end December.

Visiting United Arab Emirates Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoudi and trade minister Piyush Goyal issued a joint statement after their meeting saying that the first round of CEPA negotiations will be held on 23-24 September 2021. “Looking to build on the progress made by both countries under the Comprehensive Strategic Partnership signed in 2017; both Ministers expressed a desire to reach a mutually beneficial economic deal. Both sides will aim to conclude negotiations by December 2021 and sign a formal agreement in March 2022 after the completion of internal legal procedures and ratification," the joint statement said.

The UAE is currently India’s third-largest trading partner with bilateral trade in FY20 valued at $59 billion. The UAE is also India’s second-largest export destination after the US, with exports valued at approximately $29 billion in FY20. India was the UAE’s second-largest trading partner in 2019, with bilateral non-oil trade valued at $41 billion. The UAE is the eighth-largest investor in India, having invested $11 billion between April 2000 and March 2021, while investment by Indian companies in the UAE is estimated to be over $85 billion.

India's major exports to the UAE include petroleum products, precious metals, stones, gems and jewellery, minerals, food items such as cereals, sugar, fruits and vegetables, tea, meat, and seafood, textiles, engineering and machinery products, and chemicals. India's top imports from the UAE include crude petroleum and petroleum products, precious metals, stones, gems and jewellery, minerals, chemicals and wood and wood products. India imported $10.9 billion of crude oil from the UAE in FY20.

Both Ministers emphasized that CEPA will create new jobs, raise living standards, and provide wider social and economic opportunities in both nations. “A new strategic economic agreement is expected to increase bilateral trade in goods to $100 billion within five years of the signed agreement and increase trade in services to $15 billion," the joint statement said.

Addressing media, Goyal said items such as textiles, gems and jewellery, footwear and leather products, handicrafts may be included in the limited trade deal to be concluded by December. “Because of the trade deal, while UAE will get priority in India’s big plans in infra development and asset monetization, UAE investors will also feel more confident in investing in India," he added.

UAE on its part may focus on advanced industrial products including petrochemical equipments, ICT products and fintech, Al Zeyoudi said.

“We always look at India as a big market. There is growth in the economy of India. We want to capitalize on that and we want to be part of that story," he added.

The UAE trade minister said the past few years have been marked by a number of landmark projects between our nations. “In June 2020, Mubadala invested $1.2 billion in Indian telecom provider Jio Platforms, while in 2019 a number of UAE entities committed $7 billion to India’s food production and agriculture sectors. In return, India’s Reliance recently announced an investment of $2 billion in Abu Dhabi’s TA’ZIZ Industrial Chemical Zone," he said.

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