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Fri, Dec 27, 2024 | Jumada al-Aakhirah 26, 1446 | DXB
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India-UAE trade, investment future looks extremely bright, says report
PTI file photo
Comprehensive Economic Partnership Agreement is an important milestone in the historic partnership between India and the UAE.
Trade between India and the UAE is projected to reach about $100 billion by 2030, registering significant growth from trade volumes worth $180 million in the 1970s and $60 billion in 2019, and reinforcing the strong potential for business between the two countries, according to a latest joint report by the Indian Business & Professional Council (IBPC) and KPMG, ‘India-UAE Bilateral Trade and Investment Report’.
The report highlights the substantial bilateral Foreign Direct Investment flow between the two countries over the past decade. While fDi Markets (Financial Times) estimates that cumulative bilateral FDI flow between the two countries from 2003-2021 is valued at over $57 billion, according to the UAE Embassy in India, the cumulative bilateral FDI stands at $67 billion.
India is the second largest trading partner of the UAE, whereas the UAE is the third largest trading partner for India, as of 2019. Petroleum products and gems and jewellery account for the majority of trade between India and the UAE (2016-2020), according to the report.
Farhan Syed, Partner, head of Advisory for KPMG Middle East and South Asia (MESA) and Lower Gulf, said: “The future of the India-UAE trade and investment relationship looks extremely bright. As both nations aim to strengthen ties in the coming years, there are several opportunities across various sectors to boost bilateral trade and investment. The India-UAE Comprehensive Economic Partnership Agreement (CEPA) will help deepen economic ties between the two nations and potentially boost non-oil trade to the $100 billion goal in five years. Our report with the IBPC focuses on highlighting the immense growth potential of economic ties between the two nations.”
The Indian Embassy in the UAE estimates that the UAE’s investments in India are about $17-18 billion, of which over $11 billion is in the form of FDI (2000-June 2021). The majority of India’s FDI has been in the coal, oil and gas and real estate sectors, while the UAE’s FDI has primarily flowed into real estate and ceramics and glass, the report said.
Suresh Kumar, chairman, IBPC, said: “IBPC is happy to publish this report, which highlights significant aspects of the India-UAE relationship in terms of bilateral trade and investment flows. While trade between India and the UAE has flourished over several decades, the geopolitically strategic relationship between the two countries has blossomed into an enduring partnership in the recent past. This is poised to grow further on the cusp of CEPA – particularly with India looking to press ahead with its ambitions to become one of the largest economies, aiming to be a $5 trillion economy by 2024-2025 and a $10 trillion economy by 2030.”
Aside from FDI, the report also highlights the considerable investment by companies owned or operated by Indians based in the UAE. The UAE is home to over 3.4 million Indians – the largest expatriate community in the country. It is estimated that local investments by non-resident Indians in the UAE amount to about $ 55 billion, with investments estimated at $8-9 billion by the 70 richest Indians based in the UAE. 40,000 NRI (non-resident Indians) owned companies are headquartered in the UAE, and nearly one million jobs have been created by Indian firms and NRI-owned entities in the UAE.
The report identifies the top 12 sectors demonstrating potential for growth in bilateral trade and investments. These sectors have been identified through input from national strategies, perspectives from key government and business stakeholders, and trends in the growth and volume of bilateral trade. These sectors include gems and jewellery, pharmaceutical and medical devices, food production, security, technology startups and AI, education, financial markets/services, advanced technology, aviation, defense, infrastructure development, oil and gas, and renewables.
— business@khaleejtimes.com
A Staff Reporter
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