‘India got a liberalized visa regime under the UAE pact’   

While our free trade negotiations with the Gulf Cooperation Council (GCC) stalled in 2008, the India-UAE pact got finalized in a record 88 days. What were the difficult parts in the negotiations?

Negotiations are always difficult as a lot of stakeholders are involved.And as time passes, certain things lose context. The Middle-East is an oil/hydrocarbon economy. With the climate change talks kicking in very rapidly, they are also thinking on their feet. We may be suffering from high oil prices today, but the demand scenario may change in the future. So there is a reset going on in the hydrocarbon economies and they are looking at avenues. Dubai’s model of being a trading, financial services hub is something everyone is looking at, including their neighbour Abu Dhabi.

So, is the GCC deal also expected this year?

The GCC has also been very keen. They are keen on restarting the stalled GCC negotiations. The secretary-general of GCC has met our minister and at this point, we are firming up the terms of references (ToRs). The UAE is also part of the GCC, so we can expect other countries in the bloc to also come on board, since the text is already agreed. While there will be no discussion on the text, schedules may be changed. For instance, what is the preference that we could give to Saudi Arabia, Oman or Bahrain. The UAE-FTA can become the model for the GCC agreement too.

Is visa liberalization part of the pact?

We are a very big gainer as far as services are concerned. We have given concessions in 100 sectors and they have given concessions in 111. There will be a lot of Mutual Recognition Agreement (MRAs) that will be happening between the two sides and CEPA facilitates the conclusion of MRAs. As for visa liberalization, there are three or four categories of people such as business visitors, contractual service providers, and intra-corporate transferees. There are provisions where the visa regime has either become more liberal than what they have currently or it freezes the current regime. That means that they can’t go back once they have given the concession in the FTA. Under the FTA, business visitors will get a 90-day visa, while contractual service suppliers can get 90-day visas that are extendable. Intra-corporate transferees can get a three-year visa under this FTA. There’s a separate chapter on the movement of natural persons. The UAE has also gained as financial services and logistics are their strength, but we will gain in professional services, legal, accounting, taxation, computers, audio-visual services, education, health and R&D.

You had mentioned earlier that sectors covered under India’s PLI are excluded from the India-UAE CEPA. Is this going to be a template for future agreements or will it be a country or bloc-wise approach?

On PLIs, there are two parts to it. Protection is not necessarily by exclusion. For instance, mobile phones are not excluded from the UAE CEPA. However, the value addition norm is 40%. But we see no risk, since it is difficult to do a 40% value addition on mobiles. UAE is a big market for our mobiles, and in this treaty, we get duty-free access. We see this as opening up the mobile market to Africa. Aluminum, copper, chemicals, petrochemicals are four areas where we have given concessions and also manufacture them domestically. So, there are some producers here who will face competition. However, because our economy is growing fast, we will consume what we produce and will consume what will come through. I don’t see a threat in the industry.