Tech and startups will drive future UAE and India trade growth

Creative Commons/Ketut Subiyanto

• Manufacturing and food processing also offer significant opportunities
• Indian firms have created around a million jobs so far in the UAE
• UAE is currently India’s third-largest trading partner

Growing opportunities in manufacturing, agtech, food processing, healthtech and fintech will support future growth in bilateral trade between the UAE and India.

While petroleum products and jewellery remain the most exported goods from India to Dubai as trade is set to touch $88 billion for the current fiscal year, the relationship is changing, with officials seeing startups and technology as key drivers.

More than 30 percent of the startup community in Dubai is represented by Indians, while Indian companies and non-resident Indian (NRI)-owned entities have so far generated around one million jobs in the UAE. 

• Indian exports to GCC boom ahead of free trade talks
• India reaps early benefits from its trade deal with UAE
• Indian Web3 startups migrate to the UAE

Speaking at the India-UAE Partnership Summit in Dubai, India’s minister of commerce and industry Piyush Goyal said that sectors such as textiles, green energy, infrastructure and waste management were also among areas of opportunity for both countries.

“India and the UAE are both pursuing dynamic trade and investment policies – India hopes to see its exports touch $1 trillion in the near-to-medium term,” he said.

“Our growing bilateral trade will play an integral role in the UAE’s efforts to double the size of its economy by 2030

Goyal added that the UAE-India comprehensive economic partnership agreement (Cepa), signed in May, aims to turn cooperation prospects including the rupee-dirham trade, the virtual trade corridor, the food corridor and leveraging UAE and India’s startup ecosystems into reality.

The summit, organised by the International Business Linkage Forum (IBLF) in partnership with Dubai International Chamber, called for exploring opportunities in new sectors, moving away from the current trading patterns to reflect the desire of both nations to develop significant digital economies and ignite greater innovation.

Discussions centred on manufacturing, emerging enterprises, agro-industries, food and financial technologies.

IBLF chairman Rajiv Podar said: “Bilateral trade is all set to touch $88 billion in 2022-23. Traditionally food and energy securities have been the prime focus between the UAE and India, but the Cepa focuses also on the SME sector opening a flood of opportunities across the sectors.”

Dinesh Joshi, IBLF president and chairman of SatyaGiri Group of Companies, added: “The signing of the Cepa in 88 days shows the commitment from both nations.”

The Cepa agreement, which aims to increase trade exchange by 120 percent to $100 billion in the next five years, has also been hailed by Dr Thani bin Ahmed Al Zeyoudi, the UAE’s minister of state for foreign trade.

He said in a column for news agency Wam earlier this month that it “opens the door for Emirati products and services” and will “unleash huge opportunities for exporters to the market”, which is 1.4 billion strong.

Al Zeyoudi added that the UAE continues advanced talks to complete more agreements with five other countries while similar negotiations will soon be launched with nations in Africa, Asia, Europe and South America.

Deepa Sachanandani, deputy head of research at Century Financial, said that the Cepa was “proof of the UAE’s economic strategy to become a hub of free trade and capital”.

She added: “The UAE is India’s third-largest trading partner, so investments should follow trade and the overall numbers should go up substantially in the coming years. Agriculture and food-related sectors, in particular, should see a spike in investments from UAE to India.” 

Reuters/Adnan Abidi

Mohammad Ali Rashid Lootah, president and CEO of Dubai Chambers, revealed that the total number of Indian companies registered with the chamber has risen to more than 83,000. 

He added that activity at its international office in Mumbai – opened five years ago – will be expanded this year “to keep pace with the growing momentum in bilateral relations”.

The summit coincides with an agreement between Dubai free zone, the Dubai Multi Commodities Centre (DMCC) and the Bharat Subcontinent Agri Foundation (BSAF) to advance the global agricultural commodities sector between the UAE and South Asia.

Ahmed Bin Sulayem, executive chairman and CEO of DMCC, which has over 4,250 South Asian members, said that the timing of the agreement with BSAF was “strategically critical”.

“Trade has soared between the UAE and South Asia in recent years and will only grow further with the signing of new Cepa agreements and food trade corridors,” he said.

India also agreed last November to resume negotiations with the GCC on a free trade agreement. Previous talks were held in 2006 and 2008.

The GCC was India’s largest trading partner bloc in the 2021-22 financial year, with bilateral trade valued at over $154 billion, according to India’s Ministry of Commerce and Industry.

India’s exports to GCC countries were valued at approximately $44 billion and imports at around $110 billion during the year. GCC countries also accounted for almost 35 percent of India’s oil imports and made up 70 percent of its gas imports. 

Cumulative investments from the GCC in India are currently valued at over $18 billion, according to the Ministry.

Dr Bhaskar Dasgupta, head of strategic development for the Middle East and Africa at Apex Group, said: “The signing of the UAE-India trade agreement is evidence that removal of trade barriers can boost trade substantially. 

“Other GCC countries have seen the benefits of such trade and bilateral investment treaties, and it completely makes sense for them to also include a GCC-wide coverage of such trade treaty between them and India.

“This will ensure that Indian corporates, firms, families and funds have a bigger incentive to trade with a substantially larger market than just one specific GCC country.”

The Gulf’s demand for Indian workers rebounded significantly last year, signalling the end of the coronavirus-induced reverse migration. 

Fresh migration to the six GCC members – Saudi Arabia, Qatar, Bahrain, Kuwait and Oman, as well as the UAE – recorded an almost 50 percent increase in the first seven months of 2022, compared to the whole of 2021.

The UAE hosts the largest concentration of Indian nationals outside India, making up 3.42 million of its total population of nearly 10 million.