The landscape of international trade is perpetually in flux, necessitating adaptive strategies for businesses aiming to sustain and enhance their global footprint. A pivotal development underscoring this dynamic is the increasing utilization of free trade agreements (FTAs) by Indian exporters, particularly the Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates (UAE). Recent data from the Commerce Ministry underscores a significant upward trend in the issuance of preferential Certificates of Origin (CoOs), a clear indicator of burgeoning trade facilitation and growing awareness among businesses.
The India-UAE CEPA, which commenced its operational phase in May 2022, represents a strategic turning point in bilateral economic relations. This landmark move was meticulously designed to reduce or eliminate import duties on a vast majority of goods traded between the two nations, thereby fostering an environment conducive to seamless trade and investment. The agreement signals a proactive approach by both governments to solidify their positions as key global economic hubs and to unlock new avenues for collaborative growth.
Evidencing Increased Utilization: The Rise in Certificates of Origin
The issuance of preferential Certificates of Origin is a tangible metric reflecting the extent to which exporters are availing the tariff benefits stipulated under FTAs. For the fiscal year 2024-25, India witnessed a substantial increase in CoOs issued under the CEPA with the UAE, marking a rise of approximately 24.7% compared to the previous fiscal year. Specifically, 122,036 certificates were issued in 2024-25, a notable ascent from 98,104 in 2023-24. This consistent rise underscores the growing utilization of this crucial FTA, likely driven by increased outreach, greater clarity on procedural requirements, and expanding trade relations.
Furthermore, monthly data for April and May 2025 reinforce this positive trajectory. The number of CoOs issued for the UAE in April 2025 reached 11,825, up from 8,735 in April of the preceding year, demonstrating a 35.3% increase. Similarly, May 2025 saw 11,507 certificates issued, compared to 8,969 in May 2024, indicating a 28.3% increase. These figures collectively highlight the deepening engagement of Indian exporters with the preferential frameworks established by the CEPA, aiming to derive tangible benefits.
The Strategic Imperatives of CEPA for Businesses
The India-UAE CEPA transcends mere tariff reduction; it embodies a broader strategic vision to enhance business integration and regulatory transparency. For businesses operating within or looking to enter these markets, understanding the core provisions and their implications is paramount. The agreement facilitates significant market access, particularly for India’s labor-intensive exports, with the UAE offering zero-duty market access for 90% of India’s exports. This preferential treatment directly translates into enhanced competitiveness for Indian goods within the UAE market and, by extension, improved access to the wider Gulf Cooperation Council (GCC) states, Africa, and Europe, leveraging the UAE’s strategic geographical position.
Key sectors that have demonstrably benefited include:
- Gems & Jewellery: This sector has witnessed robust growth, propelled by duty-free access for products ranging from plain gold jewellery to polished diamonds and gemstones. This policy shift has catalyzed Indian exporters to escalate their supply of these items, capitalising on enhanced market access.
- Electrical Machinery & Electronics: High-tech products, including sophisticated electrical machinery and smartphones, have emerged as significant export items, indicating a shift towards diversified trade baskets.
- Textiles, Leather, and Footwear: These labor-intensive industries have gained considerable advantage through tariff eliminations, opening new opportunities for growth and export expansion.
- Pharmaceuticals and Medical Devices: The CEPA provides a permanent safeguard mechanism, which mitigates risks for businesses and ensures stable trade flows in these critical sectors.
What This Means for Businesses: Actionable Insights
The increasing utilization of the India-UAE CEPA by Indian exporters sends a clear signal to businesses: proactive engagement with free trade agreements is not merely an option but a strategic imperative. To navigate this evolving landscape effectively and leverage the full spectrum of benefits, businesses should undertake the following measures:
| Area | Impact | Suggested Action |
| Tariff Optimization | Reduced import duties enhance competitiveness and profit margins. | Review your product classifications (HS codes) to ascertain eligibility for preferential tariffs under CEPA. Ensure accurate documentation, including Certificates of Origin, to claim benefits. |
| Market Diversification | Access to new markets beyond traditional trade routes. | Evaluate opportunities to expand your product offerings and penetrate new segments within the UAE and the broader GCC region. Assess demand for specific products benefiting from duty eliminations. |
| Supply Chain Efficiency | Streamlined customs procedures and reduced trade barriers facilitate smoother logistics. | Optimize your supply chain to capitalize on faster clearances and reduced lead times. Collaborate with logistics partners experienced in CEPA compliance to ensure seamless movement of goods. |
| Compliance & Due Diligence | Adherence to Rules of Origin and other CEPA provisions is critical for avoiding penalties. | Educate your internal teams on the intricacies of CEPA rules of origin, particularly the 40% value addition criterion. Implement robust internal compliance frameworks to ensure ongoing adherence. |
| Investment Opportunities | The CEPA fosters an environment conducive to increased bilateral investment flows. | Explore opportunities for strategic partnerships, joint ventures, or direct foreign investment in the UAE, leveraging the enhanced business environment. |
The consistent rise in CEPA utilization underscores its vital role as a growth engine for India-UAE bilateral trade. As awareness and utilization of these agreements continue to ascend, further growth in trade is anticipated, thereby strengthening India’s position in global commerce. Businesses that strategically align with these frameworks are poised to unlock unparalleled access and foster long-term prosperity.