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 hinder trade between the two nations.
The revision comes as the two countries seek to translate the pact, signed and implemented in 2022, into better market access, smoother regulatory processes and faster movement of goods. Bilateral trade grew by a fifth to $100.06 billion in FY25, reaffirming the UAE’s position as one of India’s most important economic partners.
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The CEPA Joint Committee met in New Delhi and discussed steps to resolve operational frictions that have emerged since the implementation of CEPA, particularly in gold import quotas, data sharing, certification of origin rules and regulatory coordination for products that require technical clearances, the commerce ministry said in a statement.
India has explained its recent move to allocate gold TRQs (tariff rate quotas) through competitive bidding, a move aimed at addressing transparency issues and providing more predictable access for domestic jewelers who rely on imports from the UAE.
Under the tariff quota system, a country allows the import of a certain amount of a product at a lower or zero duty. Any imports above this quota are subject to higher taxes.
Enforce 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 Additional Secretary of India’s Ministry of Commerce Ajay Bhadoo and UAE Deputy Assistant Minister for International Trade Juma Al Kait.
“For India, better access to the UAE market is essential not only to increase 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 more deeply into regional value chains and improve their presence in sectors where competition from Southeast Asian suppliers has increased,” Parulekar said.
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India also pressed for faster progress on the pending agreement on food safety and technical requirements between the Agricultural and Processed Food Products Export Development Authority (APEDA) and the UAE Ministry of Climate Change and Environment, which is expected to ease compliance hurdles for agricultural shipments.
Exporters say this remains one of the biggest problems, as delays in sanitary and technical inspections often undermine the competitiveness of high-value perishable goods.
According to the Ministry of Commerce’s revamped trade portal, the UAE is India’s second largest export destination after the US. India’s total merchandise 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 US$35.62 billion and imports at US$48.02 billion with a trade deficit of US$12.40 billion, bringing bilateral trade between the two countries to US$83.64 billion.
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The two sides reviewed recent commitments at the policy level and agreed to work to expand trade in non-oil and precious metals as they pursue a goal of $100 billion in such goods alone by 2030, according to the Commerce Department.
The meeting also highlighted the need for stronger regulatory cooperation, particularly in pharmaceuticals, an area where Indian companies are seeking faster approvals and simplified labeling rules, according to a government statement.
A UAE delegation later met Commerce Minister Rajesh Agrawal to discuss ways to improve the use of CEPA, an issue India has highlighted as many micro, small and medium enterprises (MSMEs) still struggle to fully access the benefits of recent free trade agreements.
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The India-UAE Comprehensive Economic Partnership Agreement, which came into effect on May 1, 2022, has proven to be a significant driver of trade growth between the two countries, as bilateral merchandise trade has more than doubled over the period, growing from $43.3 billion in FY21 to $100 billion in FY25.
India exports a range of goods to the UAE, with key items being refined petroleum products, chemicals, gems and jewellery. Other major exports include pharmaceuticals, textiles, clothing, 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, particularly 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 jewelery industry.
