India, UAE review trade pact to clear bottlenecks, boost market access

New Delhi: Officials of India and the United Arab Emirates (UAE) met on Thursday to review how the Comprehensive Economic Partnership Agreement (CEPA) is working, and remove frictions that may be impeding trade between the two nations.

The review comes at a time when both countries are trying to translate the pact, signed and implemented in 2022, into higher market access, smoother regulatory processes and faster movement of goods. Bilateral trade rose by a fifth to $100.06 billion in FY25, reaffirming the UAE’s position as one of India’s most important economic partners.

The Joint Committee under CEPA met in New Delhi, and discussed steps to resolve operational frictions that have surfaced since CEPA’s implementation, particularly in gold import quotas, data-sharing, rules of origin certification, and regulatory coordination for products that require technical clearances, the commerce ministry said in a statement.

India explained its recent move to allocate gold TRQ (tariff rate quotas) through a competitive bidding process, a move aimed at addressing transparency concerns and ensuring more predictable access for domestic jewellers who rely on imports from the UAE.

Under the TRQ system, a country permits imports of a certain quantity of product to enter at a lower or zero tariff. Any imports beyond this quota face higher taxes.

Push for clearer rules

New Delhi is pushing for smoother certification procedures and clearer product-specific rules that can help exporters in sectors such as food products, engineering goods, pharmaceuticals and textiles.

The meeting was co-chaired by Indian commerce ministry's additional secretary Ajay Bhadoo and UAE's assistant under-secretary for international trade affairs Juma Al Kait.

“For India, higher access to the UAE market is critical not only to boost exports, but also to leverage the UAE’s role as a re-export hub for Africa and West Asia,” said Dattesh Parulekar, assistant professor of international relations, Goa University.

“A more effective CEPA framework could allow Indian firms to integrate deeper into regional value chains and improve their presence in sectors where competition from Southeast Asian suppliers has increased,” Parulekar said.

India also pressed for faster movement on a pending agreement on food safety and technical requirements between Agricultural and Processed Food Products Export Development Authority (APEDA) and the UAE’s ministry of climate change and environment, which is expected to ease compliance hurdles for agricultural shipments.

Exporters say this remains one of the biggest pain points, as delays in sanitary and technical clearances often erode competitiveness in high-value perishables.

UAE is India’s second-largest export destination after the US, as per the commerce ministry’s revamped trade portal. India’s total goods exports to the UAE stood at $36.63 billion in FY25, while imports stood at $63.40 billion, with a trade deficit of $26.76 billion.

In FY24, India’s exports to the UAE stood at $35.62 billion, and imports stood at $48.02 billion, with a trade deficit of $12.40 billion, taking the bilateral trade between both to $83.64 billion.

Engagements reviewed

Both sides reviewed recent political-level engagements and agreed to work towards expanding non-oil and non-precious metal trade, as they chase the 2030 target of $100 billion in such goods alone, as per the commerce ministry.

The meeting also underlined the need for stronger regulatory cooperation, especially in pharmaceuticals, an area where Indian companies have been seeking faster approvals and simplified labelling rules, as per the government release.

The UAE delegation later met commerce secretary Rajesh Agrawal to discuss ways to improve CEPA utilisation, an issue India has been highlighting as many micro, small, and medium enterprises (MSMEs) still struggle to fully access the benefits of recent free trade agreements.

The India–UAE Comprehensive Economic Partnership Agreement, which came into force on 1 May 2022, has proven to be a significant driver of trade growth between the two countries, as bilateral merchandise trade has more than doubled in this period, rising from $43.3 billion in FY21 to $100 billion in FY25.

India exports a range of goods to the UAE, with refined petroleum products, chemicals, and gems and jewellery being key items. Other significant exports include pharmaceuticals, textiles, garments, and agricultural products such as rice, pulses, and spices.

India primarily imports crude oil and petroleum products from the UAE, which are essential for the country's energy needs. Natural gas, especially liquefied natural gas (LNG), is another key import from the UAE. India also imports gold, precious metals, and stones from the UAE, which are important for its jewellery industry.