The India-UAE Comprehensive Economic Partnership Agreement (CEPA) is a bilateral free trade pact, a type of concept or agreement, that is more comprehensive than a standard Free Trade Agreement (FTA). It was signed on February 18, 2022, during the India-UAE Virtual Summit, and officially entered into force on May 1, 2022. The formal negotiations began in September 2021 and were concluded in a record 88 days.
The CEPA's origin lies in the strategic dialogues aimed at complementing the historical and cultural relations between the two nations with closer economic ties. It was created to cement and expand the existing partnership, which had its roots in the India-GCC Framework Agreement on Economic Cooperation signed in 2004. The agreement's primary goal was to boost bilateral trade from approximately USD 60 billion to USD 100 billion within five years.
The agreement works by providing preferential market access and reducing trade barriers across multiple sectors. Key provisions include the elimination of tariffs on over 10,000 tariff lines within a period of 10 years. India benefits from the UAE's preferential market access on over 97% of its tariff lines, covering 99% of Indian exports by value. The CEPA also covers trade in services, granting Indian service providers improved access to about 111 sub-sectors from 11 broad service sectors. Other mechanisms include provisions on Rules of Origin, Digital Trade, Intellectual Property Rights (IPR), and a dedicated Dispute Settlement mechanism. It also incorporates special safeguard measures to protect the domestic market from a sudden surge of imports.
The CEPA is a central pillar of the broader Comprehensive Strategic Partnership between India and the UAE. It connects to the concept of a Free Trade Area established under the World Trade Organization's (WTO) Enabling Clause. While the agreement itself has not been replaced, a Joint Committee is established to assess and propose amendments. Recently, the two nations have set a new target of USD 200 billion in bilateral trade by 2032, following the trade crossing the USD 100 billion mark twice since the CEPA's implementation. The operationalization of the Virtual Trade Corridor via the MAITRI digital platform is a recent development that complements the CEPA by streamlining cargo movement.