An examination of CEPA, which is the trade agreement between India and UAE

A brief summary of the main features of the CEPA agreement

• CEPA stands for a bilateral trade agreement called the Comprehensive Economic Partnership Agreement.
• On February 18th, 2022, India and the UAE signed a trade agreement that is bilateral in nature.
• The CEPA agreement was officially enforced starting from May 1st, 2022.
• The CEPA agreement has put in place a structured mechanism to encourage and strengthen trade between India and UAE.
• The objective of the CEPA agreement is to increase the current bilateral trade volume between India and UAE, which is currently USD 60 billion, to USD 100 billion within the next five years.
• Some of the primary sectors covered by the CEPA agreement include agriculture, petroleum and gas, petrochemicals, minerals, metals, as well as jewelry.

• The UAE has proposed providing India with preferential market access on approximately 97% of its tariff lines, which would cover 99% of Indian exports to the UAE. This would benefit a wide range of sectors, including sports goods, footwear, gems and jewelry, furniture, wood products, agricultural products, medical equipment, engineering products, and automobiles.
• Over the course of five years, the combined value of bilateral trade in goods is expected to exceed $100 billion, while the value of trade in services is projected to surpass $15 billion.
• With the bilateral agreement in place, exporters will be able to take advantage of various business opportunities, including data analytics and market intelligence, to maximize their profits.

• Regarding the trade of goods and services.
• The regulations that determine the country of origin for goods.
• Regulations and measures related to health and technical aspects that can affect trade.
• The process of resolving disagreements and conflicts that may arise between parties involved in the agreement.
• Customs processes.
• Pharmaceutical products.
• The sector involved in providing telecommunications services and products.
• Measures and regulations related to hygiene, health, and disease control.
• The legal rights that protect the creations of the human mind, such as inventions, artistic works, and trademarks.
• The procurement of goods and services by the government from private companies or individuals.

• The favored market approach is expected to yield benefits for labor-intensive sectors such as textiles, sports, plastics, gems and jewelry, engineering, agriculture and forestry, medical equipment, automobiles, and others.
• Services trade is poised to expand into a broader range of domains, including communication, distribution, environmental services, finance, healthcare, travel and tourism, recreation and culture, transportation, pharmaceuticals, and more.
• The preferential tariff rates under CEPA offer greater market access and reduced trading costs for a variety of goods, with certain goods exempted from custom duties or subject to lower rates based on their nature and classification.
• Goods originating from the UAE and meeting the Rule of Origin (RoO) requirements will qualify for one of three statuses under CEPA: Tariff Reduction (TR), Tariff Elimination Immediate (TEI), or Tariff Elimination Phased (TEP). These goods may receive a gradual reduction in customs duty over a few years, potentially reaching 0% based on specific conditions.
• The UAE's tariff list for Indian imports includes a range of items, such as precious metals like platinum, crude oil, vegetable and fruit products, non-wired glass, tubular containers, flat-rolled iron or steel, gears, and transmission elements.
• In order to qualify for preferential tax treatment, it is mandatory for items to meet the Rules of Origin (RoO) requirements, and proper documentation must be provided as evidence.
• CEPA aims to simplify customs procedures and facilitate cross-border trade by streamlining customs clearance, reducing the complexity and duration of customs processes, and adopting effective customs management practices.
• CEPA allows for the invoice declaration of origin to be recognized by an authorized signatory, eliminating the need for a conventional certificate of origin.
• CEPA promotes greater cross-border trade by enabling service providers to operate in each other's territories in various fields, including accounting, medicine, architecture, healthcare, nursing, and numerous other areas.
• Under CEPA, teams can work freely with a spirit of mutual respect and recognition, while observing each other's work areas, licenses, certifications, and other relevant aspects.
• CEPA provides access to a larger global market, expanding the scope of business opportunities for both countries across a growing number of industry segments.
• CEPA facilitates faster completion of work through bilateral cooperation, reducing time wasted on pre-inspection and expediting approval, registration, and implementation processes.