India-UAE CEPA — First-Year Trade Review and Strategic Significance
Summary
The India-UAE Comprehensive Economic Partnership Agreement (CEPA), which came into force on 1 May 2022, became India's fastest-negotiated free trade agreement — completing in 88 days.
●In its first full year, bilateral trade grew 16% to reach $85 billion, making the UAE India's third-largest trading partner and second-largest export destination.
●The agreement covers 97% of India's exports to the UAE with zero or reduced tariffs, includes digital trade provisions, and provides a services chapter covering 11 sectors.
●India's key exports — gems and jewellery, engineering goods, and pharmaceuticals — saw the highest growth.
Trade, Treaties & Connectivity
This sub-topic has appeared in 4 UPSC Prelims questions.
India-UAE CEPA (Comprehensive Economic Partnership Agreement) came into force on 1 May 2022 after being negotiated in just 88 days — India's fastest FTA negotiation.
●The UAE is India's third-largest trading partner (after USA and China) and second-largest export destination.
●The agreement offers zero-duty access for 97% of Indian tariff lines by value.
●India's CEPA with UAE was the first in a series — it was followed by India-Australia ECTA (April 2022) and the India-UK FTA is still under negotiation.
The UAE CEPA is India's strategic template for FTAs — fast negotiation, goods-led, with a services chapter — reflecting a break from India's earlier reluctance to sign bilateral trade deals.
Factual Pointers
Practice · 2 questions
Consider the following statements about India's trade agreements:
1. India-UAE CEPA was the first free trade agreement India signed after a decade-long pause in FTA negotiations.
2. The agreement covers both goods and services trade.
3. India-Australia ECTA (Economic Cooperation and Trade Agreement) was signed before the India-UAE CEPA.
Which of the statements given above is/are correct?
What is India's rank among the UAE's trading partners, and what is the UAE's rank among India's trading partners?