India-UAE CEPA makes significant positive impact
The India-UAE Comprehensive Economic Partnership Agreement (CEPA) which came into effect on the 1st of May 2022 is already creating a significant positive impact on India-UAE trade. Indian exports to the UAE,excluding petroleum productsgrew from US$ 5.17 billion during June-August 2021 to US$ 5.92 billion during June-August 2022, which denotes an increase of 14%.
It is pertinent to note that India’s global non-petroleum exports during the same period (Jun-Aug 2022) grew by 3% on an annual basis. This implies the growth rate of India’s non-petroleum exports to the UAE is almost 5 times as that of India’s non-petroleum exports to the world.
Excluding petroleum related imports, Indian imports from the UAE during the same three-month period grew from US$ 5.56billion (June-August 2021) to US$ 5.61 billion (June-August 2022) or an increase of 1% in percentage terms.
It may be noted that India’s non-oil export growth of around 14% on year-on-year basis comes in the context of significant macroeconomic headwinds such as conflict in Ukraine, COVID-19 related lockdowns in China, rising inflationary pressures, expected Policy tightening in advanced economies, global growth slowdown and consequent reduced demand, reduction in global merchandize trade (growth slowed down to 3.2% in Q1 2022 vis-a-vis 5.7% in Q4 2021)etc.
WTO’s global trade growth forecast for the entire year 2022 was at 3% in April 2022. This forecast is expected to be revised downwards as the macroeconomic headwinds had worsened since April 2022.
Indian exports are likely to increase further in the coming months with increasing use of the CEPA by the exporters and with dedicated efforts from Department of Commerce, in association with Indian Mission in the UAE, through organization of a series of trade promotion events in the UAE during the current Financial Year.
The analysis of the India-UAE CEPA was carried out from the period of June-August 2022, excluding statistics of oil trade.