The greatest contributor to India’s Gross Domestic Product (GDP), Maharashtra, could gain from the Free Trade Agreement (FTA) between India and the United Arab Emirates (UAE).
The FTA, which became operative on May 1, 2022, aims to boost bilateral commerce between India and the UAE from $60 billion to $100 billion over the course of the following five years.
The FTA will enable larger investment flows between the two nations in addition to boosting commerce. Over $35 billion has already been invested in India by companies with headquarters in the UAE, with Maharashtra receiving the majority of these funds. The state’s economic development will be boosted by the introduction of new technologies and commercial practices brought by this increased investment.
Strong commercial relations exist between India and the UAE, with non-oil commerce between the two countries valued at over $45 billion in 2021, up 60% from 2020 and 8% from 2019. With over 14% of the UAE’s total international non-oil exports, India is also the UAE’s largest trading partner for non-oil exports.
In the 22nd fiscal year, which ran from April to October, India’s exports to the UAE increased by 17.6% to a little over $18 billion, according to figures from the ministry’s Directorate General of Commercial Intelligence and Statistics. During the same time frame, imports from the UAE rose by 33% to $32.3 billion.
Removal of tariffs on a variety of products and services: The FTA would remove duties on a variety of products and services exchanged between India and the UAE, making it simpler and more affordable for Maharashtra’s firms to export to the UAE. The FTA will do away with duties on items like textiles, electronics, and engineering that Maharashtra exports in large quantities to the UAE. As the UAE is a sizable market for Indian goods, this will make it simpler for Maharashtra’s textile producers, electronics manufacturers, and engineering enterprises to sell their goods there.
As a result of the FTA’s removal of tariffs, more Indian goods, especially those from Maharashtra, are anticipated to be exported to the UAE. Data from the Indian Department of Commerce shows that in the first year following the FTA’s implementation, Maharashtra’s exports to the UAE rose by 23%. This covers the export of commodities from important Maharashtrian industries like textiles, electronics, and engineering.
The India-UAE Free Trade Agreement has the potential to dramatically strengthen Maharashtra’s economy through increasing trade and investment with the UAE. Additionally, it will advance their common objective of leveraging trade as an engine for economic growth and prosperity and solidify their already significant collaboration.
Ratnavali