According to a report by Deloitte, the economies of India and the UAE can aid immensely from their free trade agreement by sharing knowledge and the most profitable methods in various areas of mutual interest, such as energy, education, defence, and skills.

India and UAE have enforced the (CEPA) Comprehensive Economic Partnership Agreement from May 1 this year in order to increase bilateral trade and investments. It aims to boost the trade to USD 100 billion in the coming years.

The report said under the preferential trade agreement- the two economies may profit from sharing wisdom and best techniques in areas of mutual interest. It said the Indian economy is supremely dependent on crude oil imports to fulfill its domestic needs. Also, the current geopolitical tensions between Russia and Ukraine and shrinking supplies from Iran are impacting macroeconomic fundamentals.

The report added these turbulences advise that India should work toward diminishing its energy dependence by researching alternative fuels & diversifying its crude oil suppliers to ensure undisrupted supply.

Under the partnership between India and UAE, the UAE has committed to meeting India's energy conditions at competitive rates. It has vowed to help the Indian economy by constructing strategic petroleum reserves, conducting training, taking human resource development approaches in the energy sector, and developing the upstream and downstream petroleum sectors.

The report stated this would support India in becoming more self-reliant in energy. It added that the agreement between the two countries would enable boosted employment opportunities for the Indian workforce in the Gulf region and assistance to India's remittance profits.

The agreement aims to harmonise digital trade and e-commerce between India and UAE. The collaboration may extend to upcoming areas such as embedded financing and fintech lending. On food security, it stated that the UAE intends to invest USD 2 billion in constructing food parks in India to maximise crop yields and ensure its food security in return. It added the opportunities are elevated for the UAE to invest in India, where seven mega parks for the pharmaceutical sector & medical devices were announced in 2020.

Sectoral prospects for India in the UAE exist in oil and gas, construction, textiles, gems and jewellery, real estate, and healthcare.

It added that the tariff concessions delivered to the UAE in gold would reduce input expenses, raising exports to the UAE. India has competence in jewellery making and design- India and UAE can achieve this by sharing their expertise and counting value in the areas of gems and jewellery. Besides, sectoral opportunities for UAE businesses are present in logistics, infrastructure, and chemicals.

Partner, UAE Corridor Leader of Deloitte India Jehil Thakkar, said the treaty's triumph would rely on its sufficient execution in both countries. He said this free trade agreement would enable Indian companies to enter an enormous global market and scale rapidly.

Jehil Thakkar said the UAE's comfort in doing business and a place in the (GCC) Gulf Cooperation Council makes it an appealing proposal for Indian companies, particularly start-ups. Thakkar said the Emirates aims to foster Indian start-ups by offering them an ecosystem and financial support. This approach can act as a boon for these innovation-oriented, disruptive companies.

He added that the CEPA provides Indian start-ups the chance to earn access to additional (GCC) Gulf Cooperation Council countries- Kuwait, Qatar, Saudi Arabia, and Bahrain. Thakkar said the CEPA will help the UAE's development aspirations to become a trading, business, and talent hub of the world and will also improve cross-border cultural and people-to-people exchanges.

News Source: The Economic Times