The Comprehensive Economic Partnership Agreement (CEPA) has transformed how Indian business setups operate in international markets, breaking down barriers that once made cross-border business complex and costly.
Since the signing of CEPA, India-UAE bilateral trade has surpassed USD 80.5 billion, driven by a series of constructive agreements, including a reduction and removal of tariffs, and a non-discriminatory environment for cross-border trade on both sides. Read on as we discuss CEPA and how it is creating opportunities for new business and investors.
What is CEPA?
In simple terms, CEPA is a full-fledged trade agreement between the UAE and India, signed on February 18, 2022, aimed at simplifying and accelerating business operations while reducing costs for companies on both sides.
Here are the key benefits of the agreement:
- Cost-effective business in the Indian market because of the elimination of tariffs on more than 80% of products.
- Simplified compliance procedures and improved regulatory cooperation.
- Easy access to Indian products such as textiles, jewelry, and pharmaceuticals for the UAE market.
- Faster documentation and digital customs procedures.
How Does CEPA Create Opportunities for Businesses?
The agreement fosters deeper strategic alliances between Indian and UAE enterprises through improved legal frameworks and mutual recognition agreements.
Enhance Market Access
The agreement opens up 11+ service sectors and 100+ sub-sectors, such as IT, professional, financial, and business services, making it easier for companies from India and the UAE to enter each other’s markets, collaborate, invest, and provide services with fewer regulatory barriers.
Use of International standards
Both countries agree to follow globally accepted standards, so products don’t need separate or repeated approvals, allowing hassle-free trade.
Preference in UAE Government Tenders
Business setup in the UAE, whether new or established, get a price advantage of up to 10% when bidding for UAE government projects, improving their chances of winning.
Access to the Indian Government Procurement
Companies can now bid for Indian government contracts, opening up large public-sector opportunities, particularly for contracts exceeding ₹200 crore.
Re-export Opportunity
Businesses get the chance to access high-quality Indian products, especially pharmaceuticals and re-export into other regional markets.
New Business Setup Opportunity
CEPA has fueled the development of Bharat Mart, attracting investors and businesses from the Indian community to setup business in Dubai to expand their reach in the region and sell their products.
Conclusion
CEPA has opened doors for not only Indian but also UAE businesses to confidently enter each other’s markets. The agreement delivers real value through reduced tariffs that directly cut operational costs, while streamlined investment procedures make entering foreign markets much less complicated.
Such agreements pose a growth opportunity for aspiring businesses that plan to start a business in the UAE free zone or the Dubai Mainland. At Ventaraa, we help such businesses navigate the complexities of the UAE business landscape and launch stress-free.