Trade agreements with Australia, UAE to help boost exports, say export promotion councils

Context

Export promotion councils have lauded the trade agreements signed by India with the United Arab Emirates (UAE) and Australia.

India–UAE Comprehensive Economic Partnership Agreement (CEPA):

India-UAE CEPA was signed on 18th February 2022, during the India-UAE Virtual Summit
- It became effective from May, 2022.
CEPA provides for an institutional mechanism to encourage and improve trade between the two countries.

What will be the Benefits of India-UAE CEPA?

Trade-in Goods: India will benefit from preferential market access provided by the UAE, especially for all labour-intensive sectors.
Trade-in Services: Both India and UAE have offered each other market access to the broad service sectors.
Trade-in Pharmaceuticals: Both sides have also agreed to a separate Annex on Pharmaceuticals to facilitate access to Indian pharmaceuticals products.
The CEPA with the UAE is also expected to increase the total value of bilateral trade in goods to over $100 billion and in services to more than $15 billion within five years.

India-Australia Economic Cooperation and Trade Agreement (ECTA):

It is the first Free Trade Agreement (FTA) that India has signed with a major developed country in over a decade.
- It became effective from December 29, 2022.
ECTA provides for an institutional mechanism to encourage and improve trade between the two countries.
ECTA will help Australian manufacturers strengthen their supply chain resilience
- It will also help to enhance trade diversification while also connecting the two complementary and stable economies.
The ECTA between India and Australia covers almost all the tariff lines dealt in by India and Australia respectively.
- India will benefit from preferential market access provided by Australia on 100% of its tariff lines.
- This includes all the labor-intensive sectors of export interest to India such as Gems and Jewellery, Textiles, leather, footwear, furniture etc.
- Import duty applicable in Australia had been reduced on all tariff lines for plastic products with immediate effect.
- The trade pact will also raise the bilateral trade volume to $45-50 billion in five years.

What are Export Promotion Councils (EPC)

Export Promotion Councils (EPCs) are organizations of exporters, set up under the Societies Registration Act/ Companies Act, with the objective of promoting Indian exports.

Objective of EPC:

Evaluate readiness of MSMEs to export their products and services.
Recognize areas that can be improved to export effectively and efficiently.
Integration of MSME into the global value chain.
The target of USD 100 billion of exports from India by 2020.
Identify potential clusters which can start exporting directly or through aggregators and export houses with the help of export promotion councils.
Coordinate with other departments and export promotion councils for increasing shipments of products like khadi, leather, and coir.