Commerce Secretary BVR Subrahmanyam said on Saturday that areas where India’s manufacturing sector is booming and sectors where the government has implemented production-linked incentive (PLI) schemes have been excluded from the United Arab Emirates’ trade accord (UAE).
To safeguard sensitive sectors, India has excluded several sectors from the scope of this agreement. These include dairy products, fruits and vegetables, cereals, tea, coffee, sugar, food preparation, tobacco, petroleum waxes, coke, dyes, soaps, natural rubber, tyres, footwear, processed marbles, toys, plastics, aluminium and copper scrap, medical devices, television images, and sectors covered by the PLI scheme.
India and the UAE signed a comprehensive economic cooperation agreement (CEPA) on Friday, granting duty-free access to the UAE market to a variety of Indian commodities. The accord is expected to take effect in April or May.
Subrahmanyam further stated that the indigenous jewellery business would benefit from duty-free access to the market. The gold market is thriving in this country, as India offers duty reductions on imports of up to 200 tonnes.
India has agreed to concessional import tariffs on up to 200 tonnes of gold per year. In FY21, the country imported approximately 70 tonnes of gold from the UAE.
Subrahmanyam said that India is a significant gold importer. Each year, India imports over 800 tonnes of gold and have granted UAE a TRQ (tariff rate quota) of 200 tonnes with a tariff (or import duty) of 1% less than the tariff payable for the remainder of the year.
“As a result, the UAE has a 1% price advantage on gold bars. That 1% tariff differential means that those 200 tonnes will be diverted to the UAE,” he explained, adding that the primary benefit for India is “that we would pay no duty.” “access” to the UAE’s domestic jewellery market.
There was a 5% tariff on the jewellery but it has now “gone to zero,” indicating that the gem and jewellery sector is “gung-ho,” according to Subrahmanyam. TRQ is a term that refers to a quota for the volume of imports that a country may accept at defined tariff rates. After the quota is met, additional imports are subject to a higher duty. TRQs will also be included in the India-UAE CEPA for copper, polyethene, and polypropylene.
The deal also includes a chapter on digital trade, which the secretary noted is the first time it has been included in a trade agreement signed by India and demonstrates India’s willingness to discuss this bilaterally.
He said that there will be significant uniformity in regulatory standards governing how India and the UAE regulate digital trade. “We are in discussions with the EU, Australia, the United Kingdom, and Canada for digital trade or e-commerce,” Subrahmanyam said.