FTA Inking Update: No Levy on 99% of Exports in UAE
The 99% of exports of Indian goods to the United Arab Emirates will attract no levies till 2032 from 90% with immediate effect under a trade deal that has been signed between India and UAE on Friday.
The trade deal will benefit both the nations where India will be reciprocating the same by allowing duty-free access to 80% off the goods that can be imported from the Middle East nation and 90% in dairy products such as sugar, tobacco, petroleum products, and some other products are produced under the incentive scheme.
This significant safeguard mechanism will be enforced till the time this treaty is in place. The safeguard mechanism is explained in two different ways such as
- Transient safeguard remains for a specific period
- Auto triggers come into operation when we see a major surge in countries’ imports
There won’t be any kind of surge in imports from the UAE as they tend to export a series of goods to India such as petrochemicals, aluminum, copper, metal, and the list goes on. This agreement has its benefits that include adequate safeguards which have some stringent rules of origin and value addition that range from 30-35% and value can be increased by 40%.
The trade deal between UAE and India will benefit both nations in the long run as they both won’t be producing similar goods which makes it quite impeccable and beneficial for both nations. Certain sectors are kept aside in the negative list that protects the industries of the partner countries.
This trade deal will benefit the jewelry industry as one can invest in fine jewels and with duty-free access in the largest Gulf market via the United Arab Emirates. However, there is a 5% duty on Indian Jewelry in the UAE.
India is reciprocating by providing duty concessions on the import of gold up to 200 tonnes annually that can be used by the domestic industry for value addition. India imports around 800 tonnes of gold every year which means they have imported around 70 tonnes of gold from the UAE in 2020-2021.
This shows there are more opportunities for setting up business in the UAE regardless of the industry. The duty-free trade deal can be beneficial for investors, and entrepreneurs in the long run. FlyingColour Business Setup Services can help you in setting up the business, also their expertise in the field of taxation, and accounting can benefit the business.
UAE is one of the prominent and major importers of gold where the tariff-rate quota is 200 tonnes as stated in the agreement. There will be 1% less than whatever the tariff will be marked for the rest of the world. The exports and imports duty-free can benefit the business and end-consumer also it opens endless opportunities for foreign investors to settle in and set up their business in the UAE as export and import duty is fully levied on every transaction.
