India-UAE CEPA makes Significant Positive Impact on India-UAE Trade
·
Post
India- UAE CEPA, India’s Non-petroleum Exports to UAE Grow by 14% Year-on-Year during
June-August 2022
·
Growth
in Exports Achieved Amidst Significant Global Macroeconomic Headwinds
·
India-UAE
CEPA Bears Fruit; India’s Non petroleum Exports to UAE Grow by more than 5 times
India’s Non-petroleum Exports to the world during June-August 2022 (Year on year)
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 products grew 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.
Top 10 Products – On Absolute Change Basis,
excluding petroleum products
|
Chapter |
Chapter Description |
Jun-Aug 2021 |
Jun-Aug 2022 |
Y-o-y Change (%) |
|
85 |
Electrical machinery and
equipment |
549.1 |
916.53 |
67% |
|
71 |
Gems & jewellery |
1053.33 |
1404.73 |
33% |
|
10 |
Cereals |
107.93 |
281.36 |
161% |
|
17 |
Sugars and sugar
confectionery |
33.04 |
111.49 |
237% |
|
28 |
Inorganic chemicals |
90.3 |
156.92 |
74% |
|
84 |
Nuclear reactors, boilers,
machinery and mechanical appliances; parts thereof |
211.34 |
267.89 |
27% |
|
87 |
Vehicles and accessories
thereof |
122.06 |
169.03 |
38% |
|
9 |
Coffee, tea, mate and
spices |
58.37 |
95.7 |
64% |
|
7 |
Edible vegetables and
certain roots and tubers |
40.75 |
74.16 |
82% |
|
33 |
Essential oils and
resinoids; perfumery, cosmetic or toilet preparations |
48.79 |
72.39 |
48% |
Excluding petroleum related imports, Indian
imports from the UAE during the same three-month period grew from US$ 5.56 billion
(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. The month of May has not been included for the purpose of the analysis
as it is considered as a transitory period. Oil trade has not been considered as
import increase in oil/petroleum products is largely on account of the rise in global
prices and to a certain extent on an increase offtake in volumes. Further, it is
pertinent to mention that bulk of the oil imports from the UAE are of Crude Petroleum,
the demand for which is inelastic and the customs duty for which is very low.