NEW DELHI: India is seeking a review of certain provisions of the free trade agreement with the UAE, which came into effect on May 1, 2022, Indian Commerce Secretary Sunil Bhaswal said on Wednesday.
He said India is in discussions with the UAE and various issues can be discussed during the review.
The UAE is India’s third-largest trading partner with bilateral trade set to reach $83.65 billion in 2023-2024. The agreement is officially called the Comprehensive Economic Partnership Agreement (CEPA).
“With regard to CEPA, there are two issues. One is value addition norms and the other is reduction (in customs duties). So, we are in discussion with them but in the review of CEPA, various issues are being discussed. So, we are seeking a review with them and once that happens, we will look at all the issues holistically,” he told reporters here.
He was responding to questions about the budget’s proposals to increase silver imports and reduce import duties on the precious metal, as well as tariff arbitrage with the UAE.
“When (countries) give preferential tariff rates, it is subject to the rules of origin being met. So, when we do the review, we will look at all aspects including whether the rules of origin have been met and what further action we will take,” Bhaswal said.
The comments are significant as experts have expressed serious concerns about the sudden increase in precious metals imports from the UAE under the trade agreement.
Calling for an urgent review of the agreement, think tank Global Trade Research Initiative (GTRI) said the India-UAE CEPA would allow unlimited imports of gold, silver, platinum and diamonds from the UAE to India without any customs duties for the next few years.
This will result in a significant drop in annual revenue, a shift in import operations from banks to a small number of private traders and the replacement of key suppliers with Dubai-based companies, the GTRI report said.
He stressed that currently, imports of gold from Dubai attract a 5 percent customs duty, but if the alloy contains 2 percent platinum, the customs duty will be reduced to zero in three years’ time.
GTRI also argues that many imports do not meet the conditions of the rules of origin and therefore do not qualify for preferences.
Furthermore, when asked whether the government was considering reviewing a new licensing system to monitor the import of certain IT hardware products, the secretary said, “We will consider it when the time is right.”
On October 19 last year, the government tweaked import regulations for laptops and computers, allowing importers to import IT hardware from overseas with only a “permit” detailing the quantity and value.
The import permit is valid until September.
Regarding the India-Australia CECA (Comprehensive Economic Cooperation Agreement) negotiations, the Commerce Department has announced that the 10th round of talks is scheduled to begin in Sydney from August 19-22.
The two countries already have a provisional agreement in place and are in talks to expand its scope.
Regarding the India-UK trade agreement, a virtual meeting was held in July between Commerce and Industry Minister Piyush Goyal and UK Secretary of State for Business and Trade Jonathan Reynolds to discuss the future course of the pact, the report said.
India and the UK began negotiations for a free trade agreement (FTA) in January 2022. The 14th round of talks has stalled as both countries have entered into a general election cycle.
Notifying the free trade agreement between India and the European Union (EU), the ministry said the ninth round of talks has been scheduled in the Indian capital from September 23 to 27.
Negotiations have concluded on two chapters: sustainable food systems and small and medium-sized enterprises.
“At this (ninth) round of talks, the two sides will discuss necessary rules such as rules of origin, sanitary and phytosanitary measures and technical barriers to trade, as well as core trade issues including goods, services, investment and government procurement,” it added.
The concerns of Indian stakeholders regarding EU measures such as CBAM (Carbon Border Adjustment Mechanism) will also be discussed.
Published on August 14, 2024 at 16:43 IST