Indian goods worth as much as $26 billion, which are
currently taxed at 5% by the UAE, will be allowed at zero duty once the free
trade agreement (FTA) with Abu Dhabi comes into force by May.
It will particularly
help labour-intensive sectors, including textiles and garments, agriculture,
leather and footwear, where domestic exporters typically operate at thin
Some of the
remaining traded items, which will also have duty-free access to the UAE market
under the FTA, currently attract higher duties and some others are already
granted tax-free entry. So, the extent of duty relief in these products varies
While Abu Dhabi has
offered duty-free access to 90% of Indian exports to it, New Delhi will allow
80% of the UAE’s supplies at zero tax. Both the countries are aiming to raise
bilateral trade to $100 billion in five years.
According to the
ministry’s analysis, the Indian textile and garment sector will see additional
exports of $2 billion to the UAE over the next 5 years due to the FTA. Of this,
incremental exports in man-made fibre textiles alone will be to the tune of
goods, exports are projected to grow. Similarly, exports of plain gold
jewellery and gold-studded jewellery to the UAE are expected to surge by FY24.
pharmaceutical sector, exports to the UAE are projected to witness a compounded
annual growth. The commerce ministry also expects additional plastic exports to
the UAE in five years.
additional exports to the UAE are projected to be about $850 million in five
years, while in automobiles and leather & footwear, extra exports are
estimated. In services, the UAE has offered easier access in 111 sub-sectors to
India, while New Delhi has offered 100.
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