India Blocks Rerouting of UAE Goods to the US: Key Insights from Goyal

India’s Trade Stance with the UAE and the US

Commerce and Industry Minister Piyush Goyal recently made it clear that India will not support rerouting domestic goods from the UAE to the US. In a media briefing, he emphasized that while Indian products entering the UAE can be sent to other countries in Asia or Africa, they must not be incorrectly labeled as made in India when they go to the US.

During the 13th India-UAE High Level Task Force on Investments, Goyal stressed that Indian exporters should avoid shipping goods to America via the UAE, especially in light of the hefty 50% tariff the US has imposed on Indian goods. This tariff mainly affects sectors like shrimp, leather, and textiles, potentially hurting exports.

Historically, the US has accounted for around 18% of India’s total goods exports. Notably, the bilateral trade between India and the US was valued at about $191 billion. Both nations aim to double this figure to $500 billion by 2030.

On the other hand, the recent free trade agreement (FTA) between India and the UAE has boosted their trade significantly. Since it began in May 2022, bilateral merchandise trade soared from $43.3 billion in 2020-21 to $83.7 billion in 2023-24. The UAE is now India’s seventh-largest investor, having poured in $24 billion in foreign direct investment since April 2000.

In recent surveys, many businesses expressed concern over trade barriers and tariffs. A 2022 report indicated that around 65% of Indian exporters see these challenges as significant hurdles to expanding their markets. As trade dynamics shift, it remains essential for Indian exporters to navigate these waters carefully.

In summary, India is focusing on developing trade routes that support fair practices while steering clear of trade schemes that could harm its interests, especially with the US. The recent agreements with the UAE showcase India’s intentions to solidify strong trade relationships within the region.

For more insights on trade policies, check out the World Trade Organization.

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UAE, DOMESTIC GOODS, PIYUSH GOYAL, INDIA WILL NOT ALLOW REROUTING OF DOMESTIC GOODS FROM UAE TO US: GOYAL