UAE – India CEPA (Comprehensive Economic Partnership Agreement)

1. Overview

The UAE–India CEPA (Comprehensive Economic Partnership Agreement) was signed on 18 February 2022 and entered into force on 1 May 2022. It is indefinite in duration (Article 18.4), with either party able to terminate on 6 months’ notice. The Agreement’s core objectives are to strengthen economic ties, liberalise and facilitate trade, and enhance investment cooperation. It covers goods, services, investment and regulatory cooperation, going beyond a mere tariff pact. Under the CEPA, the UAE will eliminate duties on ~97% of its tariff lines (covering ~99% by value) for Indian exports, while India will liberalise a similarly high share of imports from the UAE. The vast majority of tariffs are removed immediately or phased out over 5–10 years. This opens preferential market access in labour-intensive sectors (e.g. textiles, gems, footwear, automotive, pharmaceuticals). Use of the treaty requires compliance with detailed Rules of Origin (RoO) and presentation of a Certificate of Origin (CoO) when claiming benefits. The CEPA also establishes customs simplification commitments, safeguard mechanisms, joint committees, and a formal dispute-settlement process.

2. Key Dates and Validity

Signing Date: The CEPA was signed on 18 February 2022.

Entry into Force: It entered into force on 1 May 2022, after ratification notifications were exchanged. On that date the first consignment (jewellery) was exported duty-free under the CEPA.

Validity: The Agreement is valid for an indefinite period. Either party may terminate it by written notice at least 6 months in advance (Article 18.6).

3. Purpose and Objectives

The CEPA’s Preamble and Article 1.2 lay out its purpose. In essence, the Parties seek to:

• Enhance Trade & Economic Cooperation: Deepen the long-standing partnership by expanding bilateral trade and economic ties.

• Liberalise Trade: Reduce or eliminate barriers (tariffs, NTBs) on goods and services to make trade predictable and transparent.

• Facilitate Investment: Promote investment flows by improving facilitation and cooperation in investments.

• Boost Competitiveness: Improve efficiency and competitiveness of each country’s manufacturing and services, including joint exploitation of new markets.

• Regional Integration: Support broader regional economic cooperation (e.g. through UAE’s position as a hub).

• Build on WTO Commitments: Strengthen and complement existing WTO obligations and international commitments.

These objectives mirror Article 1.2 of the CEPA. For example, both sides explicitly aimed to liberalise “labour-intensive” sectors (textiles, gems/jewellery, leather, footwear, etc.), and to address non-tariff issues (e.g. electronic trade, technical standards). The Agreement also contains novel features (e.g. a stand-alone annex on pharmaceuticals, digital trade chapter) that go beyond earlier FTAs.

4. Tariff Concessions on Goods

Under the CEPA’s Chapter 2 and its Annexes 2A/2B, India and the UAE exchanged detailed tariff schedules (at HS 6/8-digit level). Concessions are grouped into four categories: Immediate Elimination, Phased Elimination, Phased Reduction (with or without TRQ), and Exclusions.

The broad outcome is:

UAE’s Commitments (concessions on imports from India): The UAE agreed to eliminate tariffs on 97% of its tariff lines (about 7,694 of 7,581 lines, covering 99% of Indian exports by value). Specifically: 80.3% of lines are duty-free immediately on entry; 14.4% phase out over 5 years; 2.4% phase out over 10 years; 0.5% (35 products) receive a partial reduction (≤50%); only 2.4% (187 lines) are excluded. (Excluded items are mostly highly sensitive, e.g. some agricultural and luxury goods.)

India’s Commitments (on imports from UAE): India will eliminate duties on the majority of UAE products. Out of 11,908 Indian tariff lines: 64.6% (7,694 lines) go duty-free immediately; 18.3% (2,176) phase out over 5–7 years; 1.9% (225) phase out over 10 years; 5.5% (656) are partially reduced (≤50%, some with TRQs); and 9.7% (1,157) are excluded. Sensitive exclusions include certain agricultural products (dairy, cereals, spices), some gems/jewellery beyond limited TRQs, plastics, automobiles, etc.

In value terms, it is estimated about 90% of India’s exports to the UAE (>$26 billion) become tariff-free immediately, and UAE similarly liberalises key sectors for India.

Table: Tariff Line Liberalisation (CEPA)

Concession Type	UAE on Indian exports	India on UAE exports
Immediate Elimination	7,694 lines (80.3%) duty-free at entry	7,694 lines (64.61%) duty-free at entry
Phased Elimination	1,089 lines (14.4%) over 5 yrs; 180 lines (2.4%) over 10 yrs	2,176 lines (18.27%) over 5–7 yrs; 225 lines (1.89%) over 10 yrs
Phased Reduction (≤50%)	35 lines (0.5%) partial cut (≤50%)	656 lines (5.51%) partial cut (≤50%), many with TRQs
Exclusions	187 lines (2.4%) no concession	1,157 lines (9.72%) no concession

5. Claiming Preferential Tariffs

Procedures -

To claim tariff preferences, importers must present proof of origin at customs and follow simplified procedures agreed in Chapter 3 and Chapter 2:

• Determine Origin: The exporter/producer must verify that the good meets the CEPA’s origin criteria (see Rules of Origin below).

• Obtain Certificate of Origin (CoO): The exporter (or producer) applies to the designated issuing authority in the exporting country with required information and documentation. This includes a completed application form (per Annex 3A) and supporting evidence (commercial invoice, packing list, bills of materials, cost breakdown, etc.) showing how the product qualifies. The CoO format (Annex 3E) must list exporter, consignee, HS codes, origin criteria, invoice references, etc. The issuing authority reviews the claim. The CoO (paper or e-CO) is issued with an authorised signature and seal within 5 working days of export (or even retrospectively up to 12 months in exceptional cases). The CoO is valid for 12 months from issue.

• Required Documents: At minimum, the exporter submits the CoO application form (Annex 3A info), the commercial invoice (showing goods, value, HS codes), and evidence of origin (e.g. bills of materials, production records, origin declarations of inputs) to substantiate the origin claim. If quotas or TRQs apply (e.g. for gold, polyethylene), relevant certificates or permits may be needed.

• Import Declaration: The importer declares the shipment at customs and presents the original CoO (one per shipment) and supporting documents. Customs verifies the documentation. If no CoO is presented, customs may deny the claim or require a guarantee. Beneficial tariff (usually zero or reduced) is then applied as per the schedules.

• Verification and Record-keeping: Customs may subsequently verify origin claims. The importer must retain records (CoO copy, invoices, production evidence) for at least 5 years. The importing authority can request origin verification, including information from the exporter/producer or an on-site visit. The exporting authority will cooperate in such verification. If non-originating content or fraud is found, preferential duty is denied and back duties plus penalties are applied.

6. Rules of Origin (RoO)

Definition of Originating Goods: A product originates if it is either:

(a) wholly obtained or produced in one Party; or

(b) sufficiently worked or processed in one Party as per product-specific rules.

Wholly obtained goods include agricultural products grown, minerals extracted, live animals raised, etc. (Article 3.3). Any production at a factory (e.g. assembly) is not considered originating if it only involves “minimal” processes like simple cleaning, packaging, labeling, etc. (Article 3.5).

Core Origin Criteria: For goods with non-originating inputs, the general rule is:

• Value-added: The exported product must have at least 40% regional value content (RVC) from the exporting Party. RVC is calculated on FOB (or Ex-Works) value

(𝑅𝑉𝐶 = 𝐹𝑂𝐵 𝑉𝑎𝑙𝑢𝑒−𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑁𝑜𝑛 𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑡𝑖𝑛𝑔 𝑀𝑎𝑡𝑒𝑟𝑖𝑎𝑙𝑠 𝐹𝑂𝐵 𝑉𝑎𝑙𝑢𝑒 ) ×100

𝐹𝑂𝐵 𝑉𝑎𝑙𝑢𝑒

• If RVC ≥ 40%, the value-added threshold is met. Note: India negotiated that certain sectors (e.g. some gems/jewellery) may qualify with lower value-add (3 7%), reflecting special rules.

• Tariff Shift (CTC): All non-originating materials must undergo a change in tariff classification at the 4- or 6-digit HS level during production. This ensures a substantial transformation.

• De Minimis: Up to 10% (by value) of non-originating inputs is allowed (de minimis) even if they do not meet the CTC rule. For textiles (HS 50–63), instead of 10% by value, a 7% by weight cap applies. The wholly-obtained category has a tighter 1% cap.

• Minimal Operations Excluded: Routine processes (drying, cleaning, simple cutting, assembling prepackaged pieces, labeling, mixing of like products, etc.) are explicitly excluded from conferring origin.

• Cumulative Origin: The CEPA allows accumulation of origin between UAE and India (bilateral cumulation). Inputs originating in one Party are treated as originating if sent to the other Party for further processing.

• Product-Specific Rules (Annex 3B): Certain products have tailored rules. For example, steel products (Ch.72–73) require a “melt and pour” process: all steel must be fully melted to liquid and recast in the exporting country.

Worked Examples:

• Cotton T-shirt (HS 6109): FOB value $100, 80% Indian-spun cotton, 20% imported fabric. CTC met (fabric to knitwear). RVC = 80%. Qualifies.

• Leather Shoe (HS 6403): 30% imported components. CTC met (raw leather to footwear). RVC = 70%. Qualifies.

• Steel Rebar (HS 7214): Recycled scrap melted and recast in UAE (“melt and pour” satisfied). RVC = 40%. Qualifies.

• LED Television (HS 8528): FOB $500, non-origin parts $300. CTC met. RVC = 40%. Qualifies.

• Plastic Polymer (HS 3901): $100 final value, $30 imported monomers. CTC met. RVC = 70%. Qualifies.

RoO Summary Table:

Origin Criterion	Requirement
Wholly Obtained	Entirely produced in one Party (e.g. mined, grown, fished).
Tariff Shift (CTC)	All non-originating inputs must change the HS 4- or 6-digit heading during production.
Regional Value Content	≥ 40% of the product’s value (FOB or ex-works) must be from originating materials.
De Minimis	Up to 10% (by value) of non-origin inputs allowed (7% by weight for textiles).
Minimal Operations	Cleaning, packaging, labelling, and simple cutting/mixing do not confer origin.
Special Rules (e.g. Steel)	Some goods have extra tests (e.g. steel “melt and pour”).
Cumulative Origin	Inputs originating in one Party count as originating when used by the other.

7. Certificate of Origin (CoO)

To claim CEPA preferences, importers must submit a Certificate of Origin (Form at Annex 3E) which certifies that the good meets the RoO.

• Issuing Authorities: Designated agencies in each country.

• Format: Must follow Annex 3E format, listing all required details.

• Validity: 12 months from issue, for one shipment.

• Paper and Electronic: Both paper and fully digitised e-CoOs allowed.

• Issuance Procedure: Issued within 5 working days (or retrospectively up to 12 months).

Sample Certificate of Origin under UAE–India CEPA (Annex 3E format attached in the Agreement). The CoO must be signed and sealed by the issuing authority in the exporting Party.

Table: CoO Documentation Checklist

Document / Details	Purpose / Particulars
CoO Application (Annex 3A)	Completed by exporter/producer: lists exporter name, address, product details, and an itemised cost breakdown.
Commercial Invoice(s)	Shows goods, HS codes, quantities, values; referenced in CoO.
Packing List / Bill of Lading	Details shipment contents and transport (if applicable).
Bills of Materials / Cost Records	Evidence of origin: shows inputs used, their origin, and costs (to calculate RVC).
Manufacturer’s Declaration	Certifies final operations.
Import Permits / TRQ Certificates	If required (e.g. gold, polymers).
Approved Exporter ID (if applicable)	Exporter code/signatory list.
Supporting Permits/Certificates	Any required quality/safety certificates.

8. Compliance, Penalties, and Institutional Mechanisms

• Rules of Origin Subcommittee: Meets at least annually to review origin criteria.

• Joint Committee: Oversees the entire CEPA and meets regularly to monitor progress.

• Safeguards: Permanent safeguard mechanism available for import surges.

• Non-Compliance & Penalties: Preferential tariff denied if rules violated; domestic penalties apply.

• Dispute Settlement: Formal panel process under Chapter 15. Conclusion The CEPA between India and the United Arab Emirates strengthens bilateral trade and economic cooperation by reducing tariffs, improving market access, and promoting investment. Overall, the agreement enhances economic partnership, boosts trade opportunities, and contributes to long-term growth for both countries.

9. Conclusion

The CEPA between India and the United Arab Emirates strengthens bilateral trade and economic cooperation by reducing tariffs, improving market access, and promoting investment. Overall, the agreement enhances economic partnership, boosts trade opportunities, and contributes to long-term growth for both countries.