India has embarked on a new journey a new free trade agreement (FTA) journey to be precise with renewed zeal and vigour. INDIA and the United Arab Emirates (UAE) signed a Free Trade Agreement (FTA), which is set to reduce tariffs for 80 per cent of goods and give zero duty access to 90 per cent of India’s exports to the UAE.
India’s approach towards FTAs is now focusing more on gaining meaningful market access and facilitating Indian industry’s integration into global value chains.
The UAE has emerged as an important economic hub not just within the context of the Middle East/West Asia, but also globally. The UAE, due to its strategic location, has emerged as an important economic centre in the world.
In recent years, the UAE, through its ‘Vision 2021’, has sought to diversify its economy and reduce its dependency on oil. 4. Since 2012, growth has been led, according to a World Trade Organization document, by the non-hydrocarbon sectors reflecting the successful diversification of the economy.
Although the UAE has diversified its economy, ‘the hydrocarbon sector remains very important followed by services and manufacturing. Within services, financial services, wholesale and retail trade, and real estate and business services are the main contributors’.
As Union Minister of Commerce and Industry has repeatedly emphasised, India would no longer be signing trade agreements just to join a group, but the new approach of FTA negotiations would respond to the need of new emerging dynamics in international trade and the Indian economy.