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07 June 2022

UAE implements Comprehensive Economic Partnership Agreement with India related to imports

Executive summary

On 19 May 2022, the Dubai Customs Authority issued Policy No. 54/2022 on the implementation of the Comprehensive Economic Partnership Agreement (CEPA) signed between India and the United Arab Emirates (UAE). The CEPA has been in force since 1 May 2022.

The CEPA enables traders from both countries to avail preferential treatments and customs benefits related to the importation of various goods. The Department of Commerce or the Central Board of Indirect Taxes and Customs of India, and the Ministry of Economy in the UAE, respectively, are responsible for the issuance of the certificate of origin for preferential treatment.

Detailed discussion

The CEPA between India and the UAE facilitates trade between both countries by providing immediate and progressive duty reductions on imported goods and transparency in customs procedures for preferential treatment of imported goods.

The key benefits and requirements related to the CEPA are:

  • Immediate duty benefits for textiles, engineering products, gems and jewelry, pharmaceuticals and medical devices, automobiles, leather and footwear, agricultural products, wood and furniture products, and sporting goods
  • Progressive duty reductions over the coming 5 to 10 years for electronic goods, chemicals and petrochemicals, articles of stone, cement, ceramics and machinery items
  • Facilitation on using third-party invoicing for preferential treatment on cross-border transactions
  • Direct transport condition to avail preferential origin treatment
  • Facilitation of market entry access for pharmaceutical products
  • Specific origin determination rules for preferential treatment based on:
    • Wholly obtained goods
    • Change in the Harmonized System chapter
    • Change in headings and subheadings
    • Value-added criteria for products
    • Sharing of detailed product information with the authorities to comply with preferential treatment requirements

Implications

Companies involved in the import and export of goods that are potentially eligible for preferential treatment will need to review and amend their products' database related to their cross-border transactions to avail customs benefits and to avoid customs compliance issues.

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For additional information with respect to this Alert, please contact the following:

Ernst & Young Consulting LLC, Dubai

Ernst & Young LLP (United States), Middle East Tax Desk, New York

Document ID: 2022-0882

 

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