UAE-India to create mechanism for bilateral trade in national currencies
The United Arab Emirates and India have discussed ways of enhancing bilateral investments in key sectors like food security, manufacturing, infrastructure, energy and technology at a meeting held in Mumbai on 11 Oct 2022.
Minister of Commerce & Industry Piyush Goyal and Sheikh Hamed bin Zayed Al Nahyan, Member of the Executive Council of the Emirate of Abu Dhabi, led the discussions in these as well as other investments and trade sectors during the 10th meeting of the UAE-India High Level Joint Task Force on Investments (‘The Joint Task Force’).
Co-chairing the meeting, Goyal agreed with his UAE counterpart to explore establishment of efficient and integrated Single Window Solutions and Virtual Trade Corridors to reduce costs and time involved in trade and investment related procedures.
From the UAE side, it was agreed that the Department of Economic Development of Abu Dhabi will explore this area of cooperation with the concerned counterparties in India in order to agree a mutually beneficial implementation approach.
As a means of encouraging increased investment flows by the UAE sovereign investment entities into India, the two sides reviewed Emirate’s request with respect to providing tax incentives to certain sovereign investment entities under existing UAE-India Tax Treaty. India responded to provide the same under the existing domestic tax laws of the country.
It was agreed that bilateral discussions should continue to reach a mutually beneficial outcome which meets the policy objectives of both countries. In this context, the support provided to UAE sovereign entities through the Finance Act 2020 and subsequent issuance of notifications for tax exemption was noted and appreciated.
An important area discussed was the creation of a mechanism for carrying out bilateral trade in national currencies. Both sides agreed to continue ongoing discussions between Reserve Bank of India and Central Bank of the United Arab Emirates on Unified Payment Interface (UPI) as a common digital payments platform.
In the positive backdrop provided by the extensive and growing trade and investment relationship between India and the UAE, the two sides acknowledged the importance of using the Joint Task Force as a forum to address specific issues and difficulties faced by the companies when investing in each other’s countries.
India has set up a UAE Plus Desk in 2018 and established a Fast Track Mechanism in 2019 to identify, resolve and expedite issues faced by the UAE companies and investors in India.
The UAE Special Desk in India was commended for its efforts in leading and facilitating UAE investments across sectors. In this regard, it was agreed that the Indian side will provide the necessary support to UAE Fast Track Mechanism in India to ensure speedy resolution of pending issues and difficulties experienced by a number of UAE companies and banks operating in India.
It was also agreed that a similar India Fast Track Mechanism would be set up in the UAE immediately to resolve issues pertaining to the Indian investors in the UAE, and to assist Indian companies in market entry and expansion when investing in the UAE.
In this context, issues pertaining to some Indian companies in UAE were noted and it was agreed that the UAE side will provide the necessary support to ensure speedy and mutually satisfactory resolution of these issues.
This was the first meeting of the Joint Task Force since the signing of the India-UAE Comprehensive Economic Partnership Agreement (CEPA) which entered into force in May 2022.
The CEPA is a major trade agreement set to transform bilateral economic, trade and investment ties and propel economic growth. It is a clear roadmap for continued strengthening of the Comprehensive Strategic Partnership between the two countries at an accelerated pace.
The co-chairs urged businessmen on both sides to gain optimal benefits from the conducive trade ecosystem created under CEPA. The co-chairs also noted progress on various aspects of the CEPA including establishment of the CEPA Joint Committee and related sub-committees.
The two delegations reviewed the status of the negotiations of the India-UAE Bilateral Investment Treaty. Twelve rounds of negotiations have been conducted till date. Both sides noted that much progress could have been achieved since the commencement of the negotiations, and therefore reiterated their commitment to accelerate the process for an early conclusion of a balanced and mutually beneficial agreement.
Speaking at the meeting, Goyal said, “The India-UAE relations are witnessing unprecedented momentum. We have a large number of opportunities for cooperation and increasing investments especially the key sectors like infrastructure and technology.
“During the last meeting of the Joint, Task Force we had decided to fast-track the negotiations of CEPA, and we finalized the agreement in unprecedented 88 days. I am sure that the discussions we have had today on mutually beneficial areas like food security and bilateral trade in national currencies, will also see similar thrust from both sides. Fintech.”
Sheikh Hamed bin Zayed Al Nahyan added, “Since the last meeting of the Joint Task Force in October 2021, several significant milestones have been reached that serve to cement the close, growing and strategic relationship between India and the UAE.
“Within this broader context, the Joint Task Force continues to facilitate positive dialogue between our two countries as we strengthen the economic links that have helped to draw our nations together.
“The Joint Task Force has proved effective in creating new opportunities and removing barriers, and it will continue to play an important role in promoting bilateral investment in support of our respective countries’ growth ambitions.” fiinews.com
