India and the UAE are set to seal a bilateral trade agreement, with an official announcement to be made during Prime Minister Narendra Modi’s visit in the new year. This is expected to boost trade between India and the Gulf countries, as well as Africa.
The trade pact is expected to include key provisions for easier movement of Indian professionals and workers to Emirates. UAE is considered as the largest base for the Indian diaspora. As such, companies expect some flexibility in hiring workers from India, with some of the eligibility test requirements also expected to be eased.
Sources said there will be a message to signal easier investment norms. UAE entities are expected to pump in money into creating critical infrastructure in India. In regards to import duty, some areas of interest for India, such as food products, are expected to get concessions so that they can compete with products from other parts of the world.
They said some of the products from the petro-chem value chain will be allowed lower duty access into India. The efforts, as per government sources, has been made to ensure that third country imports are not routed through minor value addition in the UAE, including those from other Gulf countries and China.
It should be noted that UAE, a member of the Gulf Cooperation Council, was negotiating a free trade agreement with India a few years ago; talks were abandoned. Talks were paused with several trading partners.
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Now the bilateral trade agreement between India and the United Arab Emirates shows a significant change in the Modi government’s stance. India has shed its inhibitions after its departure from RCEP due to the overarching presence of China. Since then, New Delhi has entered into negotiations with the United Kingdom, Australia, European Union and Israel. Some FTAs are to be worked out in the next couple of months.
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