Among the GCC member countries, this will be the first ever CEPA with one of the countries – UAE.
It will be a historic day in the bilateral relations between India and the United Arab Emirates on Friday when the first ever trade agreement is signed. Among the Gulf Cooperation Council (GCC) member countries, this will be the first ever Comprehensive Economic Partnership Agreement (CEPA) with one of the countries – UAE.
Will this lead to the India-GCC FTA?
The GCC and India had signed a Framework Agreement on Economic Cooperation in 2004. A couple of rounds of negotiations had taken place in an effort to operationalize the Framework Agreement, however due to the differences among the members of GCC, it could not move forward.
Countries including Bahrain, Kuwait, Saudi Arabia, Qatar, Oman and United Arab Emirates are the members of GCC.
“After the Qatar blockade from 2017-21, it became increasingly difficult to advance the India-GCC FTA negotiations which might take even more time as the grouping puts its house in order. Meanwhile CEPA that is set to be signed during the virtual Summit on Feb 18 between Prime Minister Narendra Modi and Sheikh Mohamed bin Zayed Al Nahyan will set the ball rolling,” Ambassador Anil Trigunayat tells Financial Express Online.
Why were India-GCC FTA talks initiated?
As has been reported earlier, such an agreement with GCC countries was expected to lead to deeper economic engagement, and work towards reducing duties and tariffs. The countries in the region are interested in agricultural as well as industrial products from India.
A new QUAD was formed last year
India, UAE, the US, and Israel together created a new QUAD in 2021. And the primary focus of this new grouping is maritime security & cooperation, connectivity, digital and transport infrastructure.
The new QUAD has plans to create an International Forum for Economic Cooperation and to have senior level professionals for the Joint Working Groups in the areas of interests which have been identified by the four countries.
Why is the region important?
This region is important for India’s Energy Security as almost 60 percent of oil and gas as well as remittances comes from here. Countries like the UAE and Israel are considered as stability in the region.
As has been reported earlier, at the trilateral level – India, UAE and Israel are already working together in deepening cooperation in trade and investment. In 2021, an Israeli company is in the process of producing a robotic solar cleaning technology in India. This project is based in the UAE.
Military Cooperation
Maritime Cooperation is one of the most important components in the India-UAE relations. The Indian Army Chief Gen MM Naravane had visited that country for the first time in 2020.
And the Gulf country has expressed interest in importing military platforms from India. India and UAE are also having discussions about the possible sale of the Indo-Russian BrahMos supersonic cruise missile.
View of a former Ambassador
Sharing his view with Financial Express Online, Ambassador Trigunayat says, “When Prime Minister Narendra Modi came to power in 2014, the Arab world was somewhat suspicious of his close relations with the then Israeli PM Netanyahu. But UAE became the first port of call for him followed by several others in the region following through the real strategic shift in bilateral relationships. In fact this year also he was supposed to visit UAE for the Expo 2020 and Kuwait on his first overseas tours in the New Year when the Comprehensive Economic Partnership Agreement (CEPA) was expected to be signed.”
“UAE is home to the largest Indian Diaspora of over 3.5mn and has emerged as India’s third largest trade partner and a hub and a conduit for maritime trade and security.”
According to Ambassador Trigunayat, “Cooperation during the pandemic increased even more and so did the both way investments in strategic assets and projects. For the first Indian consortium got a 10 percent share in the lower Zakum oil fields for exploration and UAE started investing in Indian refineries and downstream sectors in India including in strategic reserves as it committed to utilize USD 75 bn funding pipeline. As the economic engagement grows a need was felt to institutionalize and raise the bar even further through a CEPA.”
“Two countries are successfully partnering in Africa in the agriculture sector and have become part of the new Quad of West Asia with its Abraham Accord partners Israel and USA for synergizing technological prowess and strategic advantages for mutual benefit . For India all the three countries are its exemplary strategic partners and with all three New Delhi is discussing the Free Trade Agreements (FTA). Hence all could be synced seamlessly, if and when needed,” he opines.
Adding, “PM Modi has also turned the ‘Link West ‘policy into an ‘Act West’ and now into an ‘Extended Neighborhood First policy’ which is already paying significant dividends as proactive measures on all sides have been initiated”.
https://www.financialexpress.com/defence/india-and-uae-trade-and-investment-are-the-key-drivers-expert/2436961/
