ABU DHABI: Trade between the UAE and India has rapidly grown over the past two decades due to their strong political, social and economic links, with the bilateral exchange topping Dh216 billion in fiscal year 2014-2015.
The figure includes around Dh122 billion worth of Indian exports to the UAE and Dh94 billion worth of UAE export to India, mainly oil and petroleum products. This made the UAE the largest market for Indian products in the Middle East while the subcontinent maintained its position as one of the UAE’s top trading partners.
Indian businessmen and traders have contributed significantly to the economic fabric of UAE while Indian professionals also occupy important positions in various banks, private companies and business establishments in the country.
India also has the largest foreign community in the UAE, the second largest Arab economy after Saudi Arabia, and decades of strong socio-economic and political relationship have turned India into one of the largest investors in the emirate.
During a visit to New Delhi by UAE Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan in September 2015, the two countries agreed to utilize their good ties to realize a potential $75 billion investment commitment by the UAE in Indian infrastructure.
A statement after the visit said:”The two sides agreed to increase the bilateral trade by 60% over the next five years and also to encourage the investment institutions of the UAE to raise their investments in India, including through the establishment of UAE-India Infrastructure Investment Fund, with the aim of reaching a target of $75 billion.”
The UAE, a major OPEC crude producer, is already a key oil supplier to India, the fourth largest crude consumer in the world. During his visit to Abu Dhabi in August last year, Indian Prime Minister Narendra Modi was assured that the UAE would meet all its hydrocarbon needs.
“India is importing oil now and the UAE is open to meet demand for any oil from India,” UAE Minister of Economy Sultan Al Mansouri said, adding that the issue would be discussed further by representatives of the two sides.
Official data showed Abu Dhabi currently provides at least nine per cent of India’s energy needs and the supplies are projected to rise in the future.
India is also the largest investor in Dubai’s free trade zone of Jebel Ali, which is home to more than 800 leading Indian companies. The number of Indian companies in the Free Zone increased by about 10 per cent in 2014 and was expected to have grown further through 2015.
“The evolution of Dubai as a regional trading hub in 1990s provided a major boost to bilateral trade relations between India and the UAE,” said Sultan Ahmed Bin Sulayem, Chairman of DP World and Ports, Customs and Free Zone Corporation.
“Today, India is UAE’s largest trading partner. Jafza, which is home to more than 800 top India multinationals, has played a key role in strengthening trade relations between the two countries,” he added.
Commenting on the opportunities for Indian investors, Bin Sulayem further said, “Most of the countries in the Middle East region are currently focused on diversifying their economies in order to reduce their dependence on oil.
“These countries are estimated to be spending more than USD 4 trillion in developing economic infrastructure suitable for nurturing non-oil business activities.” While Dubai itself is a major investment destination, it also has an important and growing presence in India.
Dubai Ports (DP) World operates at Nhava Sheva International Container Terminal Private Limited, Chennai Container Terminal Private Limited and India Gateway Terminal at Cochin.
The Rajiv Gandhi Container Terminal in Vallarpadam, developed and operated by Dubai Ports World is the first International Container Trans-shipment Terminal in India. In 2012, DP World won the contract to build and operate a single berth terminal facility at Nhava Sheva, Mumbai. The $ 200mn worth facility expected to be operational in 2015 will have an annual handling capacity of 800,000 TEUs.
Many leading Indian firms and banks also have an important presence in Dubai. They include L & T, HCL Infosystems, Nagarjuna Construction Company Limited, Hinduja Group, Danube, Sobha Group, Indian Oil Corporation, Reliance Industries, Essar Group, Bank of Baroda, State Bank of India, IDBI Bank, Union Bank of India, Oriental Bank of Commerce, Punjab National Bank, Indusind Bank, Bank of India, Indian Overseas Bank, HDFC, Axis Bank, Andhra Bank, Canara Bank and Corporation Bank.
Ras Al Khaimah Free Zone is also home to a large number of Indian companies operating in diverse sectors including Pioneer Cement (USD 105 million investment), JBF RAK Polyester Chips and Films (USD 100 million), Eternity Technologies of Al Dobowi Group manufacturing industrial batteries (USD 55 million), Ashok Leyland Bus/Truck Assembly (USD 50 million), Mahindra Emirates Vehicle Armoury (USD 25 million), Dabur India Herbal Products(USD 25 million), RAK Steel Products (USD 25 million), and Bosco Aluminium Products (USD 10 million).
