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India predicted to be central to Saudi and UAE exports

India's Piyush Goyal and UAE's Thani Al at 'INDIA-UAE CEPA' Bilateral Business Engagement trade meeting Shrikant Singh via Reuters Connect
Indian minister of commerce and industry Piyush Goyal and UAE minister of state for foreign trade Thani Al Zeyoudi at the India-UAE Cepa meeting last year
  • India to be key trade partner for UAE and Saudi by 2030
  • Standard Chartered says exports from the two to reach $1trn
  • UAE and Saudi Arabia aiming to diversify economies away from oil

India is forecast to be one of the fastest growing export corridors for both Saudi Arabia and the UAE over the next decade.

The Future of Trade report by Standard Chartered projects that global trade will reach $32.6 trillion with a growth rate of 5 percent by 2030. 

The combined value of exports from the two biggest economies in the Gulf is predicted to be $1 trillion over the same period. 

The bank said trade corridors anchored in Asia, Africa and the Middle East will outpace the global growth rate by up to four percentage points, driving combined volume in these regions to $14.4 trillion and account for 44 percent of global trade by the end of the decade. 

The Middle East-South Asia trade corridor alone will be worth $734 billion in the same period.

Saudi’s new focus

Saudi Arabia is seeking to boost trade through increasing industrial production.

The Saudi Vision 2030 strategy sets out how the kingdom will diversify its economy away from oil to be more digital and knowledge-based.

The Future of Trade report said that Saudi Arabia, the largest economy in the Middle East, will see its exports grow to $418 billion by 2030, representing an annual growth rate of 4.8 percent.

It highlighted India, Singapore and the UAE as being among the fastest growing export corridors, while China will remain the largest export destination for the kingdom.

By 2030 Standard Chartered predicted that metals and minerals will make up more than three-quarters of the kingdom’s exports, replacing crude oil as the dominant factor.

“Saudi Arabia aspires to become the next global logistics hub, and has pledged to make its economy more sustainable and innovative," Mazen Bunyan, CEO of Standard Chartered, Saudi Arabia, said.

"Leveraging its strategic location at the centre of Asia, Africa and Europe, it is enhancing its shipping networks to connect these regions and is continuously liberalising international trade of goods and services.”

UAE expansion

Separately, Standard Chartered said the UAE’s exports are projected to reach AED2 trillion ($544 billion) by 2030, an annual growth rate of 5.5 percent.

India will remain the UAE’s largest export destination, with imports and exports exceeding AED485 billion.

Exports to Turkey, Vietnam and Singapore will be among the fastest growing – exports to Vietnam will remain relatively small at AED2.2 billion, but Standard Chartered expects growth of 7.2 percent.

Exports to Turkey are forecast to see double-digit growth to 2030 while imports will increase by 8.4 percent annually, putting it ahead of India (9 percent and 8.2 percent respectively).

Standard Chartered said the UAE is undergoing “substantial capacity expansions in critical industries”. 

It added that the country has achieved an export diversity ratio of 0.54 percent, surpassing the global average of 0.68. The smaller the number, the higher the diversity. 

“The UAE's success in diversifying its exports along with the development of new trade corridors positions the country favourably for sustained growth and reinforces its economic resilience," Rola Abu Manneh, CEO of Standard Chartered UAE, said.

“The UAE continues to advance trade integration, and spearheads diversification efforts with policies supporting innovation and sustainability.

"We maintain a positive outlook on the UAE’s ability to capitalise on these opportunities and sustain its upward trajectory in global trade arena.”