India-UAE CEPA delivers; cereals & vegetables lead export surge

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By Our Special Correspondent

New Delhi, September 25: India’s strategy to stay away from trade blocks and focus on bilateral Comprehensive Economic Partnership Agreement (CEPA) appears paying rich dividends.

The India-UAE CEPA, which came into effect on May 1, 2022 has shown stellar outcomes in the first few months, said the Ministry of Commerce in an official statement.

“Indian exports to the UAE, excluding petroleum products, grew from $5.17 billion during June-August 2021 to $5.92 billion during June-August 2022, which denotes an increase of 14 per cent,” said the Ministry in the statement.

India’s global non-petroleum exports during the same period (Jun-Aug 2022) grew by just three per cent on an annual basis. That makes the growth rate of India’s non-petroleum exports to the UAE almost five times as that of India’s non-petroleum exports to the world.

“Excluding petroleum related imports, Indian imports from the UAE during the same three-month period grew from $5.56 billion (June-August 2021) to $5.61 billion (June-August 2022) or an increase of 1a mere one per cent,” added the Ministry.

Sugar and sugar confectionary and cereals constituted the fastest growing goods to be exported to the UAE, registering a growth of 237 per cent and 161 per cent respectively.

Edible vegetables and electrical goods were the next items of goods which saw massive rise in the exports in the stated period.

It was also underlined that India’s non-oil export growth of around 14 per cent on year-on-year basis came amid significant macroeconomic headwinds such as conflict in Ukraine, COVID-19 related lockdowns in China, rising inflationary pressures, policy tightening in advanced economies, global growth slowdown and consequent reduced demand, reduction in global merchandize trade (growth slowed down to 3.2 per cent in Q1 2022 vis-a-vis 5.7 per cent in Q4 2021), etc., added the Ministry in the statement.

It may be noted that the WTO’s global trade growth forecast for the entire year 2022 is of just three per cent, which may be revised downwards as the macroeconomic headwinds 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,” noted the Ministry.

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.