India is seeking a review of the trade act with the UAE. It is also called CEPA (Comprehensive Economic Partnership Agreement). According to sources, India is having some concerns about the CEPA agreement leading to a review of it again. The main concern is the unlimited imports of gold, silver, platinum, and diamonds. The agreement gave a lot of visible benefits in the trade within its first year of launch. It took the trade up to 12% high to $31.3 Billion. The trade agreement had the goal of providing concessions on trade to each other.
Why Is India Seeking A Review Of The CEPA Policy?
India has been seeking a review of the CEPA policy from some time. The major concern behind the review is the increasing imports of these precious metals from the West Asia Nations. Sunil Barthwal says that they are focusing on the two major issues currently. The first one is value addition and the second is the reduction of custom duties. After the completion of the review, CEPA will be looking at other issues as well.
The CEPA agreement gives a lot of benefits to the imports of gold and silver. India gets a 1% duty concession on gold and 7% on silver. It was 15% duties on these products before the Budget. However, it is now 6%. Thus, it will be now a level playing field for the other exporters also. However, the CEPA states to lower it down to zero in some time. The gold currently imported with a 5% duty will go to zero.
If everything is fine, what is the need for the review? According to the sources, the imports are not as per the rules of the actual conditions. Thus, it does not qualify for concessions. Apart from that. there are other pacts under the discussions as well. It includes the India-Australia CECA pact. The commerce ministry states that the 10th round of talks may take place between 19 August and 22 August in Sydney.
The India-UK FTA agreement will be in its 14th round of talks soon. From 23-27 September, there will be a ninth round of talks for the India-EU free trade agreement. There will be several steps for the betterment of the trade pacts between India and other countries.
Metals like gold and silver are exported from some countries. However, the UAE is the third largest trade partner of India. In the financial year 2023-24, there was a bilateral trade of $83.65 Billion. The CEPA pact aims to take the trade to $100 billion in its five years of execution.
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