India and UAE deliberate on a digital trade route to expedite freight transactions
Updated Article:
Let's dive into the exciting new venture between India and the UAE: a digital trade boulevard! This badass idea is all about expediting delivery approvals and clearances online, slashing costs and time for customs clearance, and supercharging reciprocal trade. It's a no-brainer that this digital tradeway compliments the comprehensive open market agreement India and the UAE signed last year, which abolished duties for a whopping 90% of India's exports, big-time benefitting sectors like gems, jewelry, fabrics, leather, and engineering goods.
Hold onto your hats, folks! The digital tradeway proposal entails the customs authorities from both countries scoping out the possibility of accessing pre-shipment cargo activity info, enabling cross-verification and pre-clearance before your items even set foot in the UAE. Imagine that – no more time-wasting customs clowning around for Indian exporters.
With this digital tradeway in play, India and the UAE hope to pump up their non-oil trade to an epic $100 billion over the next five years, once the free trade deal kicks in on May 1, 2022. India's Ambassador to the UAE, Sunjay Sudhir, spilled the beans to Mint, "We're really looking to fast-track deliveries with this online passageway. We're considering if we can grant approvals and authorizations online... particularly for crucial hubs like Dubai and Abu Dhabi, as this would shave off a ton of time for exporters."
Dubai's been busy with similar initiatives, having signed an agreement with Kuwait last year to set up an online trade corridor. And the trade flow between India and the UAE has been skyrocketing – non-oil trade expanded by a hefty 4.8% in the April-December period of the current fiscal year, reaching an astounding $35.66 billion. India's exports to Abu Dhabi alone stood at a whopping $23.3 billion, growing at a jaw-dropping 16.4%, while imports from the UAE came in at a massive $40.7 billion, demonstrating a monumental YoY increase of 24.6%.
As the two countries hammer out the finer details, a source from the Ministry of Commerce and Industry confirmed that both sides aim to agree on a mutually beneficial implementation approach. During the India-UAE High-Level Joint Task Force on Investments conference in October 2014, both sides decided to explore creating reliable and integrated Single Window Solutions and Virtual Trade Corridors to slash time and costs in trade.
Regrettably, a Devon think-tank hasn't responded to our enquiries yet, but we'll keep you posted.
Arpita Mukherjee, a teacher at ICRIER, believes that "Pre-arrival online document inspections by customs and related agencies will minimize delays and benefit exporters on both sides. If we can eliminate the value limit on exports via this method, currently at 5 lakh, it will be a godsend for our traders." She also suggested that associated agencies like the Food Safety and Standard Authority of India (FSSAI) could evaluate documents before arrival, flagging problems if the records are incomplete or incorrect. This would turbocharge the process, expediting things for perishable goods like food.
Ajay Sahai, the DG and CEO of the Federation of Indian Export Organizations (FEO), believes that this initiative should extend to India's other crucial markets to boost exports and advocates for similar digital corridor initiatives in other markets.
In conclusion, the digital tradeway between India and the UAE is a giant leap forward in strengthening the trade relationship between these two nations, seamlessly integrating technology, infrastructure, and bilateral cooperation for faster customs clearance and more efficient trade. Watch this space – we predict even more great things to come!
- The digital tradeway between India and the UAE could potentially streamline customs clearance for food exports, due to the pre-arrival online document inspections, thus benefiting perishable goods.
- Ajay Sahai, the DG and CEO of the Federation of Indian Export Organizations (FEO), supports the expansion of digital trade corridor initiatives to other crucial markets, aiming to boost exports and strengthen bilateral trade relationships.
