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Cepa a boost to Indian brands looking to expand in the UAE

Several sectors are benefiting from the lowering of trade barriers between the two countries

As the trade relations between India and the UAE strengthen along the lines of the Indo-UAE Comprehensive Economic Partnership Agreement (Cepa) and India’s exports to the region continue to grow, more Indian brands will emerge targeting the UAE market with new and innovative products, further cementing their presence in the region and beyond to international markets, research shows.

Historically, Indian brands have leveraged their entry into the Middle East to gain access to existing and new customers with familiar ethnicities, wide international networks and explore various avenues of collaboration with other brands.

The region is home to a high concentration of expatriates with strong purchasing power.

“India’s brands are looking to tap into UAE’s affluent, well-developed retail market and target the increasing demand from the diaspora of Indian customers, both online and offline. Dubai’s appeal as a prime tourist destination is not only attributed to its affluent native Indian population but also to its well-established infrastructure, luxurious resorts, elevated shopping experiences, hospitable culture, and diverse attractions for weddings, events and celebrations. These factors have positioned Dubai as an ideal market for Indian brands seeking to expand their global presence,” Sameer Shah, Director, Candle Partners, an Indian investment bank, told Khaleej Times in an interview.

Indian jewellery brands have a strong presence in the lucrative UAE market due to their intricate designs, high-quality craftsmanship, and use of precious metals and stones. According to data, the overall jewellery exports amounted to $5.4 billion in June 2022, which saw 17 per cent year-on-year growth, owing to the signing of the Indo-UAE Cepa in February 2022.

Renowned Indian jewellery brands like Tanishq, Malabar Gold & Diamonds, Kalyan Jewellers, and PC Jewellers, have successfully expanded their operations to the UAE showcasing their collections to a diverse customer base comprising not only the Indian diaspora but also international tourists. Malabar Gold & Diamonds was the first Indian jeweller to have utilised the duty benefits of the Cep to import 25kg of gold in October 2022, marking a significant milestone for Indian jewellery brands. Additionally, the company was also one of the first few brands to secure permissions with tax concessions under the agreement.

Personal care and cosmetic brands are finding the UAE market profitable by offering a range of natural and organic products to cater to local consumer preferences. “Established Indian brands such as Himalaya Herbals, VLCC, Biotique, and Lotus Herbals available on e-commerce platforms across UAE have the potential to capture the NRI consumers, while emerging brands like Nykaa, Sugar Cosmetics and Mamaearth offer high quality, and affordable skincare, haircare, and makeup products to pull in the younger, environmental-conscious masses,” Shah says. These brands are launching through various channels including online platforms, pop-ups, and retail stores, and partnering with local UAE companies, as done by Nykaa on partnering with Apparel Group for Gulf foray bringing their expertise and partnerships to beauty-forward consumers in the Middle East, he added.

Apart from jewellery and personal care, Indian apparel brands are making waves in the UAE market, with apparel exports valued at $1.2 billion in 2022. This is partly due to a diverse consumer base in the UAE seeking both luxury and affordable fashion options.

Indian cuisine renowned for its diverse flavours and textures has been well received in UAE. Not only are a number of Indian F&B brands thriving in the UAE, but direct-to-consumer (D2C) brands such have also expanded internationally and offer their ready-to-make, healthy breakfast and snack products throughout the country.

Indian FMCG companies in the region have effectively capitalised on their formulations, cultural food varieties, ingredients and rich flavours to meet the preferences of local consumers and managed to grow demand rapidly. Major brands like Dabur, Godrej, and Marico have expanded their reach through strong distribution networks and marketing strategies. This includes a manufacturing unit established by Dabur. These brands have a significant presence in supermarkets, hypermarkets, and local stores with diverse product offerings.

“The UAE market has emerged as a lucrative destination for Indian brands seeking to expand their global footprint. Indian companies have found a receptive audience in the UAE’s diverse and growing consumer base within a wide range of industries,” Shah said.