UAE assures timely support to Indian Customs to check FTA violation

UAE Assures Cooperation with India on CEPA Compliance Amid Trade Concerns

The United Arab Emirates (UAE) has pledged timely assistance to India in addressing concerns regarding potential violations of the free trade agreement (FTA) between the two nations. The assurance comes in response to a significant rise in imports of silver, platinum, and dates, which raised questions about adherence to rules governing the bilateral Comprehensive Economic Partnership Agreement (CEPA).

Checking Origin Certificates
India voiced worries about prospective third-country imports that could be routed through the UAE in order to take advantage of CEPA incentives. In order to verify the legitimacy of certificates of origin issued under CEPA, Indian Customs requested verification, and the UAE promised to respond quickly.
This measure will help India ensure compliance with rules of origin (ROO) and value-added norms under the agreement.

“Timely verification of ROO compliance will help ascertain that goods originate from the UAE and are not rerouted from other nations, which could mitigate import surges,” said an official monitoring the issue.

Increase in Imports of Silver Causes Concerns
UAE imports of silver increased by an astounding 5,853% in FY24, from $29 million in FY23 to $1.74 billion. India believes that some of these goods may have come from other nations, evading origin regulations.
The CEPA mandates a gradual reduction of import duties, with silver duties set to reach zero over ten years. To address these challenges, India lowered the most-favored-nation (MFN) import duties on gold and silver to 6% from 15% in the 2024 budget.

India-UAE Joint Commission Meeting Outcomes
The recent India-UAE joint commission meeting in Dubai tackled various trade-related issues:

Meat Certification: UAE agreed to expedite the recognition of Indian meat certification.
Pharmaceutical Registration: The UAE promised to fast-track Indian pharmaceutical product registrations and work toward a viable reference pricing mechanism.
Commitment to Compliance: The United Arab Emirates reiterated its dedication to working with India to prevent any evasion of trade regulations.
Piyush Goyal, the minister of commerce and industry, brought up the issue with Thani Al Zeyoudi, the minister of state for foreign trade for the United Arab Emirates, who promised India that the UAE would address the issues.

An official emphasized the UAE’s commitment to stop any rule-breaking by saying, “We will revisit the matter at the next India-UAE joint committee meeting in India.”

Trade Patterns Between the UAE and India
Although commerce between India and the UAE has increased significantly, there is still cause for concern due to the growing trade deficit:

Imports: India’s imports from the UAE rose 55.12% to $38.64 billion in April-October 2024, compared to $24.91 billion in the same period of the previous fiscal year.
Exports: From April to October of 2023, Indian exports to the United Arab Emirates increased by 15.86% to $20.93 billion.
Trade imbalance: From $6.85 billion to $17.71 billion over the same period last year, the trade imbalance grew significantly.
Implementation of CEPA and Next Steps
The UAE-India In order to promote bilateral commerce, CEPA, which went into effect in May 2022, features gradual tariff reductions. But worries about ROO compliance have led India to look for more stringent monitoring and verification procedures.

While making sure that the terms of the CEPA are followed, India and the UAE are nevertheless dedicated to growing their trade relations. Another chance to discuss these issues and deepen bilateral economic cooperation will be presented at the next joint committee meeting in India.