India-UAE trade pact will fuel demand for spare parts, tools & hardware
India has signed a comprehensive economic cooperation and partnership agreement (CEPA) with UAE (United Arab Emirates) to deepen its engagement between two countries. India has signed a comprehensive economic cooperation and partnership agreement (CEPA) with UAE (United Arab Emirates) to deepen its engagement between two countries. UAE with close to 35 lakh strong Indian diaspora presence in UAE is reinforcing the fact that both countries have huge untapped potential to be explored for trade and economic ties.
This agreement is particularly important in view of the fact that once it comes into effect, India can export 90% of its products in UAE at zero duty from the day of implementation either in April or May in the current year so the export basket has become very large with India’s 3rd largest trading partner having two way trade of USD 52.8 Billion in the current financial year from April to December 2021.
India has identified 1000 products like chemical, poultry, spices, leather & engineering goods. It is for the 1st time that there are digital elements in the entire deal such as paperless trading, digital payments, & online consumer protection.
Engineering goods will be one of the biggest beneficiaries of this pact. During April-January 2021-22, engineering exports to UAE recorded a sizeable 148.4 percent rise to US$ 4,609.78 million from US$ 1,855.83 million in the same period last fiscal. Another advantage is the UAE’s proximity to Central Asia, Africa & other Gulf countries. This will help open a gateway for Indian businesses in these regions.
According to BookMyParts.com study, increase in export of engineering goods is fueling demand for tools & hardware, spare parts, accessories and components. Having this trade pact with UAE, there will be significant increase and jump into demand for these goods in India. As these products facilitate the manufacturing of engineering goods, demand is likely to increase from current levels significantly.