Exclusive: Minister Piyush Goyal says Cepa on track to create one million jobs in India

It’s time for some stock-taking as it has been a year since the Comprehensive Economic Partnership Agreement (Cepa) between the UAE and India came into effect. Piyush Goyal, Minister of Commerce & Industry, Consumer Affairs & Food & Public Distribution and Textiles, India, spoke to Khaleej Times about the overarching impact of Cepa on the UAE-India business and the way forward. He says the agreement, who came into effect on May 1, 2022, is beginning to deliver on the shared vision of the leaders of the two countries.

India's exports to the UAE touched a record high of $31.2 billion in 2022/23. What are the sectors that have benefited the most?

India and the UAE enjoy strong cultural and economic relations. The two countries are also each other’s key trade partners with robust trade and investment in various sectors. The Cepa has added a new momentum to this relationship. This agreement is beginning to deliver on the shared vision of the leaders which was to see our bilateral economic and commercial exchanges growing exponentially in the years to come. In that sense, the near-record breaking export figures to the UAE come as no surprise. It is heartening to note that these trade gains have been broad based. Many sectors, including labour-intensive ones such as gems & jewellery, engineering products, automobiles, food products, and chemical products have already experienced significant gains from this landmark agreement. On the employment front, the Cepa is anticipated to create more than 1 million jobs in India in the near future.

Two-way trade now stands at $84 billion; what are the key takeaways from this landmark agreement?

The Cepa is a historic agreement of strategic significance to both the partners. While creating a conducive trade ecosystem for businesses in both the nations, this agreement is helping the already strong bilateral relationship to be transformed into a new age, future-ready partnership connecting the visions of the leadership of our two friendly countries. The true complementary nature of this strong economic partnership is now being realised by the two countries. Our bilateral merchandise trade has recorded around $84 billion in FY 2022-23, registering an increase of 16 per cent year on year. The overall growth in bilateral trade reflects early gains accruing from the agreement. We had set ourselves a five-year bilateral trade in goods target of moving from $60 billion (pre-Cepa trade figure) to $100 billion. With a phenomenal performance in the first year itself, I believe we could look at revising these targets upwards. Trade gains in the initial post-implementation phase of the Cepa are just the beginning; there are still a large number of opportunities for cooperation among two nations in key sectors such as infrastructure and technology. Post-Cepa, both sides are expected to continue push for expanding the boundaries of collaboration.

The UAE is now India’s third largest trading partner. Has the pandemic changed the dynamics of relying on one country? Countries are ‘friend-shoring’ as we speak, preparing for the next crisis, if and when it happens.

Covid has taught the whole of humanity a number of lessons; one amongst them is that we cannot deal with the complex and evolving challenges of the New Age in isolation. We need to work together and collaborate more closely than ever. I am glad that with great partners like the UAE, we are already moving ahead on these lines to forge multiple partnerships covering the entire gamut of our bilateral relations, be it in the domain of food and energy security, climate, trade and investments. Covid has also front-loaded the debate on reconfiguration of supply chains; in this context, India, with its favourable business environment, liberal FDI norms, constantly improving ease of doing business, rapidly improving physical and digital infrastructure, and the visionary and decisive leadership of Prime Minister Modi, has been largely acknowledged to play a key role in the reconfigured supply chains and emerge as a global manufacturing hub and a reliable partner.

The UAE and India are expected to discuss the integration of their customs and logistics portals for tracking shipments. Have you set a timeline for a likely integration? Is it feasible?

India and the UAE have a shared vision to forge a partnership that is future ready with special focus on cooperation in newer & emerging areas like sustainability, climate action, innovation, digitalisation, startups, food and energy security, health, fin-tech and skilling. Exploration of initiatives like establishment of efficient and integrated Single Window Solutions and Virtual Trade Corridors to reduce the cost and time involved in trade and investment related procedures is a part of this initiative. Creation of a virtual trade corridor is expected to facilitate quicker clearance of shipments as the approvals and clearances related to customs will be given online on both sides. There are no definite timelines set but we intend to execute these on a priority basis.

How easy will it be for NRI-backed companies in the UAE to do business in India under the deal?