Strategic relations bind India and the United Arab Emirates(UAE), especially after signing of the Comprehensive Economic Partnership Agreement (CEPA) and the Indian Government’s approval to Export Wheat to the UAE for domestic consumption. The CEPA cuts all tariffs between the goods of the two countries and aims to increase the annual trade to $100Billion within 5 years.
Owing to the bad weather conditions that led to low output of wheat this year, India with a view to control rising prices of wheat, curtailed the exports of the commodity on 13th of May 2022. However, India still kept the wheat exports open for countries with food insecurity and for countries who issued a Letter of Credit (LC) prior to this decision.
Exporting Wheat From India
India is the 2 nd largest producer of wheat in the world. Wheat is the largest traded agro-commodity among others in the world. Therefore the export of wheat is always profitable for the Indian export industry. The Agricultural and Processed Food Products Export Development Authority (APEDA) is revolutionising Indian wheat export companies by rebuilding and developing agriculture infrastructure. Owing to its efforts, the agricultural sector has seen a huge growth in terms of production and export in the foreign market and is profitable for both farmers and exporters.India exported 1.8 million tonnes of wheat to countries like UAE, Afghanistan and Bangladesh post imposing the restrictions on exports of wheat.
According to the government, following licences and criteria are mandatory to start exporting wheat :-
- APEDA Registration- Exporters require to obtain an APEDA licence which is like a seal of approval from the government related to the standard of the product.
- Import-Export Code- The registered import-export code is required when filing for a registration cum membership certificate (RCMC), which is viewed as a gateway certificate for any foreign trade..
- Company Registration- To start a wheat export business, one needs to get his company registered under either of sole proprietorship, one-person company, partnership company, Limited Liability Company and private limited company.
- Open Bank Account- Once the company is registered, one needs to open a current bank account in the company's name.
- GST Registration- Once the company is incorporated, one has to apply for GST registration and get a GST number to further perform business activities.
- ESI Registration- Employee State Registration is an insurance scheme for workers working under the producing unit, which is mandatory while producing wheat.
- Employees Provident Fund Registration- EPF registration is necessary for businesses where more than 20 employees work.
- Trademark Registration- Registration of brand name with a trademark is important to protect the brand internationally.
Wheat Trade Between India And UAE
UAE is one of the major trading partners of India and is one of the 5 countries that asked for Indian wheat via diplomatic channels.
For the UAE, India is a major source of wheat and has a great scope because of the same consumption pattern as seen in India. Considerable number of Indian migrants are living in the UAE creating a huge demand for the commodity.
UAE is an oil based economy with high gross per capita income creating little scope for farming and has a high demand for agricultural commodities like wheat. UAE has invested in India’s agriculture sector to ensure food security in their country and avoid market price fluctuations. UAE exports nearly 50% of imported food products to other GCC countries so there is much scope for wheat trade as UAE is known for its re-exports which have only temporarily been suspended in the case of Indian Wheat. Import Wheat In India
The Middle Eastern country imported $146 million worth of wheat from Russia in 2020 and is now looking towards India as a replacement due to the ongoing war between Russia and Ukraine.
Conclusion
As can be seen, UAE is a major oil producing nation which while has a little scope for farming has a huge demand for agricultural products like Wheat. Owing to the same consumption pattern as seen in India and a considerable number of Indian migrants living in the UAE, the demand for Indian wheat is high and so if you are thinking of exporting wheat to UAE, you may bank on the World’s 1st Digital Trade Hub for your global trade that helps you connect with global buyers in an efficient and cost-effective manner.
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