Indian manufacturers urged to set up shop in UAE

Reuters/Amit Dave

• Imports will get difficult, executive warns
• Royal family office in talks with companies
• Subsidies and long-term funding available

The future of the UAE’s economic partnership with India hinges on more manufacturing taking place in the Gulf state, a senior executive from a royal family office has said.

Zulfiquar Ghadiyali, managing director of Royal Arab Holdings, the business arm of the private office of Sheikh Tahnoon bin Zayed Al Nahyan, said Indian businesses were being encouraged to set up factories in the Emirates.

“Indian companies must understand that there will be a time when the UAE will expect you to not just bring your goods here, but come and manufacture them here,” Ghadiyali said. 

“Very soon there will be a situation where imports will get more and more difficult, because the UAE wants to promote ‘Make it in UAE’.”

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Speaking at the India-UAE Business Forum in Dubai last week, Ghadiyali said Sheikh Tahnoon’s private office was in talks with Indian manufacturers to facilitate factory openings. 

“There are a number of benefits to take advantage of, with in-country value being the most important,” he said.

“We are here to support Indian companies. We are helping them at the highest level, working closely with government-backed entities to set up factories and manufacture here, and to take advantage of ‘Make it in UAE’,” he said.

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“Some of the best manufacturers of India are in touch with us,” he added. 

“Wherever there’s a shortfall, wherever there’s an escalation in cost, we are making it good through government subsidies and through our long-term investments.”

AGBI reported last month that the UAE is to direct an extra AED23 billion ($6.3 billion) to local manufacturers as it strives to diversify its economy.

Ghadiyali stressed the importance of creating partnerships where investments benefit both parties.

“We ask entrepreneurs to come and set up a partnership,” he said. 

“Show us that you aren’t just here to take money away, you’re here to give it back and employ people, and that ultimately all the profits that will be made will be ploughed back to the UAE entity and that the GDP of UAE will grow. Because that’s what UAE aims for, creating a better and a larger pie of the non-oil economy.”

Ghadiyali suggested that Indian companies could fill the void left by China in Africa by using the UAE as a base. This would allow businesses to avoid the trade finance constraints associated with direct India-to-Africa trade.

Sheikh Tahnoon is one of Sheikh Mohamed bin Zayed’s younger brothers and the chairman of two of Abu Dhabi’s biggest sovereign wealth funds, Abu Dhabi Investment Authority and ADQ. He also chairs International Holding Company and the artificial intelligence and cloud computing group G42.

Investment from India into Gulf countries has dropped considerably in recent years, despite growth in bilateral trade.

Trade between India and the six GCC states – Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the UAE – reached almost 16 percent of the country’s total in the last year. This compares with the EU’s 11.6 percent share of India’s trade.

Despite this growth, cumulative foreign direct investment from India to the GCC dropped from almost $10 billion in the five years from 2013 to 2017 to just over $5 billion from 2018 to 2022, according to Alpen Capital.