India’s Ministry of Commerce and Industry has predicted that Indian exports to the UAE will increase further in the coming months with the growing use of the CEPA by exporters…reports Asian Lite News
India’s non-oil exports to the UAE rose phenomenally by five times in the three months since the implementation of a bilateral Comprehensive Economic Partnership Agreement (CEPA) compared to India’s non-petroleum exports to the world during the same period.
The Indian Ministry of Commerce and Industry released the findings of a comprehensive study of the UAE-India trade since the implementation of the CEPA on 1st May this year.
“The UAE-India CEPA is already creating a significant positive impact on bilateral trade. Indian exports to the UAE, excluding petroleum products, grew from $5.17 billion during June-August last year to $5.92 billion during June-August 2022, which works out to a year-on-year increase of 14 percent,” the Ministry said.
“India’s global non-petroleum exports during June-August 2022 grew by three percent annually. This implies that the growth rate of India’s non-petroleum exports to the UAE is almost five times as that of India’s non-petroleum exports to the world,” the study revealed.
It is predicted that Indian exports to the UAE will increase further in the coming months with the growing use of the CEPA by exporters. “A series of trade promotion events in the UAE during the current financial year are planned.”
Although the CEPA went into force on 1st May, the Ministry said the first month of its implementation was not included in the study because it was considered a transition period. Hence the analysis is for three months, from June to August.
During the same period, India’s imports from the UAE grew from $5.56 billion to $5.61 billion. The trade increase in both directions is significant “in the context of global macro-economic headwinds, including policy tightening in advanced economies, global growth slowdown and a reduction in international merchandise trade.”
India’s global non-petroleum exports during the same period grew by just 3% on a year-on-year basis, the Ministry said, seeking to emphasise the much higher growth in such exports to the UAE which were at $5.92 billion compared to $5.17 billion a year ago.
“Excluding petroleum related imports, Indian imports from the UAE during the same three-month period grew by 1% to $5.61 billion,” the Ministry noted, adding that oil trade were not considered for this analysis for two reasons.
“…Import increase in oil/petroleum products is largely on account of the rise in global prices and to a certain extent on an increase offtake in volumes. Further, it is pertinent to mention that 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,” it explained.
The sharpest jump in Indian exports to UAE over this period was seen in sugar (up 237%), cereals (161%), vegetables (82%), inorganic chemicals (74%) and electrical machinery and equipment (67%).
The Commerce Ministry said it expects Indian exports to increase further in the coming months with increasing use of the India-UAE Comprehensive Economic Partnership Agreement (CEPA) by exporters and a series of trade promotion events planned in the UAE during 2022-23.
WTO’s global trade growth forecast for the entire year 2022 was at 3 pc in April 2022. This forecast is expected to be revised downwards as the macroeconomic headwinds had 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 the Department of Commerce, in association with the Indian Mission in the UAE, through the organization of a series of trade promotion events in the UAE during the current Financial Year.
The analysis of the India-UAE CEPA was carried out from the period of June-August 2022, excluding statistics on the oil trade. The month of May has not been included for the purpose of the analysis as it is considered a transitory period.
Oil trade has not been considered as the import increase in oil/petroleum products is largely on account of the rise in global prices and to a certain extent on an increased offtake in volumes. Further, it is pertinent to mention that the 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.