Auto, pharma, engineering exports to UAE will grow through trade pact

India’s automobile exports to the United Arab Emirates (UAE) are expected to reach US$ 160 million in the next five years, according to government estimates. India and the UAE signed the CEPA or a free trade agreement (FTA) that includes goods, services, investment, digital trade, government procurement, and rules of origin, among other areas. Engineering exports are expected to increase by 10% in the first two years and 15% in the next three years to reach US$ 7 billion, US$ 8 billion, and US$ 9.2 billion in FY25, FY26, and FY27, respectively, due to the Comprehensive Economic Partnership Agreement (CEPA).

It is expected that the average per-unit price for Indian manufactured vehicles will reduce from US$ 12,829 to US$ 12,218. In addition, exports of plain gold jewellery and gold-studded jewellery would increase to US$ 10 billion in 2023 as the tariff concessions offered to the UAE will reduce the import cost of inputs. Export of textiles and agricultural products are projected to be worth US$ 2 billion and US$ 850 million, respectively, over the next five years.

Export valuation of pharmaceuticals and medical devices, which are expected to grow at a CAGR of 26-28% over the next five years, can reach over US$ 1 billion. This is because the CEPA aims to simplify the access to Indian pharmaceutical products – especially automatic registration and marketing authorisation – of Indian generic medicines in 90 days. It must be noted that UAE’s local formulation industry is developing rapidly as the country plans to become a regional pharmaceutical distribution hub by 2030 – a move that can greatly benefit India.