UAE, India sign 'milestone' pact to boost economies

The United Arab Emirates and India signed a "milestone" economic deal to boost trade and investment on Friday, as the countries seek to bolster their economies after the coronavirus pandemic.

Abu Dhabi Crown Prince Mohammed bin Zayed Al-Nahyan, the UAE's de facto ruler, and India's Prime Minister Narendra Modi held a virtual summit to witness the signing of the Comprehensive Economic Partnership Agreement, among other pacts.

The deal's signing "is a milestone event in our bilateral relations," the official Emirati news agency WAM quoted Indian Foreign Minister S Jaishankar as saying.

"It will open new opportunities in both trade in goods and services, and will lead to enhanced investments."

WAM said the pact is "expected to usher in a new era of economic cooperation and unlock greater avenues for trade and investment".

"The agreement … not only deepens our economic and trading relationship with a close partner but unlocks a new phase of global cooperation for us," Sheikh Mohammed said in a joint statement.

"There will be a huge flow of trade and investments between both nations and it's going to open the door for more business opportunities," Emirati Minister State for Foreign Trade Thani Al Zeyoudi told Reuters.

The agreement, which was not immediately made public, eliminates 80% of tariffs on UAE and India goods, while all tariffs are to be removed within ten years, Al Zeyoudi said.

UAE commodities like aluminium, copper and petrochemicals would benefit from the removal of tariffs, he said.

The deal also covers services, investments, intellectual property, and a commitment by the UAE to create 140,000 highly skilled jobs by 2030.

Piyush Goyal, India's commerce minister, told reporters the deal could create more than a million jobs for India in the next few years, particularly in labour intensive sectors such as the auto industry, plastics, leather and engineering.

India-UAE trade is valued at $59 billion, making the oil-rich Gulf country India's third largest trading partner for the year 2019-20, after China and the United States, according to the Indian foreign ministry.

The UAE is India's third largest export destination with nearly $16 billion clocked in 2020-21, it added.

Major exports include petroleum products, precious metals, stones, gems and jewellery, minerals, food items and textiles.

The UAE hopes that non-oil trade with India will rise from pre-pandemic levels of $40 billion to more than $100 billion within five years, WAM said.

The two countries have had close and friendly ties for decades, establishing diplomatic relations in the early 1970s — shortly after the Gulf country's founding.

Indians in the UAE make up the largest expatriate community, approximately 35 per cent of its 10-million strong population.

Remittances sent back to India from its citizens in the Emirates reached more than $17.06 billion in 2019, according to the Indian foreign ministry.

Earlier this week, the UAE signed a similar package of deals with Turkey.