ET: India-UAE economic ties have grown rapidly in recent years. What would you attribute this growth to?
Mohammad Ali Rashed Lootah (MARL): The two countries share an especially close relationship that is only set to grow stronger. There are more than 3.5 million Indians living and working in the UAE, creating enormous mutual economic benefits.
As a key global trading hub, Dubai’s close relations with India span over 3,000 years. That’s a unique partnership on the global stage. In recent years, we have worked to build stronger formal economic ties for mutual benefit. India is the UAE’s second-largest trading partner and was the first country to enter into a CEPA with the UAE, unlocking a host of benefits for cross-border trade and investments.
The value of bilateral trade increased to exceed $85 billion during 2022. The two countries have set an ambitious target to increase non-oil bilateral trade to $100 billion by 2030, underlining the opportunities for Indian companies looking to do business in Dubai.
Dubai International Chamber, one of the three chambers under the umbrella of Dubai Chambers, has a representative office in Mumbai that was established in 2018. The office supports Indian companies and investors by providing access to timely market intelligence, operational expertise and trustworthy partners in the emirate. It also assists Dubai-based companies in India.
A total of 6,717 new Indian-owned companies signed up as members of the Dubai Chamber of Commerce during the first six months of 2023 alone, representing year-over-year growth of 39%. This brought the total number of Indian member companies to more than 90,118, reflecting the key role Indian businesses play in supporting the sustainable growth of Dubai’s economy.
ET: What sectors have benefited the most from the recent CEPA?
MARL: We are already witnessing an exciting boost in economic activity, with trade between India and the UAE increasing by approximately 15% since the agreement came into force in May 2022.
The agreement has had a positive impact on some of the top products exported from Dubai to India, with many areas experiencing at least double-digit growth in terms of the volume and value of exports between 2021 and 2022. We have recorded significant growth in exports in precious metals, food, manufactured goods, beauty products, electronics and industrial machinery, to name just a few.
Dubai FDI Monitor’s data has revealed that the estimated FDI capital flowing into Dubai in 2022 was AED47 billion ($12.8 billion) compared with AED26.07 billion ($7.1 billion) in 2021. The top five source countries for FDI projects accounted for 54% of the total in 2022. India ranked 3rd in the top five, with a share of 12%. Sectors in Dubai that attracted large investments from India included ICT, business services, F&B and renewable energy.
In my view, the CEPA heralds the dawn of a new era in trade relations between our countries that enables greater access for UAE exports entering the Indian market via the reduction or removal of tariffs on more than 90% of products, as well as removing unnecessary technical barriers for both UAE and Indian exporters.
ET: Which sectors have recently gained traction due to the programmes initiated by the Dubai government?
MARL: Many sectors have seen a surge in bilateral trade, most notably ICT, food and beverage, and renewable energy. Dubai Chambers is advancing cross-border dialogue on the exciting opportunities emerging in sectors including agritech, digitalisation, finance, and future healthcare.
Traditionally, India has exported mostly petroleum products and jewellery to the UAE. Less than one year after the CEPA came into effect, India’s jewellery and gemstone exports had grown by 8.2%, according to India’s Gem and Jewellery Export Promotion Council.
Today, companies based in India should not only be looking to export a wider range of products such as motor vehicles and mobile phones to Dubai, but also to take full advantage of the emirate’s strategic position as a leading global trading and logistics hub.
Our analysis indicates that several areas are ripe for cross-border cooperation, including advances in food production and innovations in the digital space ranging from the metaverse to cryptocurrency trading.
Dubai’s ambition is to expand bilateral trade ties with like-minded markets to enhance global competitiveness, boost foreign direct investment, attract top talent and position the emirate as a global hub for business, investment, and innovation. As Dubai’s economy continues to grow, there are opportunities for forward-looking Indian entrepreneurs to help the emirate meet its needs in terms of clean energy, manufacturing, real estate, and construction and food, to name a few sectors with high potential for growth.
According to data gathered by our research department, promising opportunities exist to attract Indian companies to Dubai in key sectors including agriculture, forestry, fishing, education, electricity and gas, real estate, manufacturing, the arts, entertainment, and professional, scientific and technical services.
ET: How is Dubai Chambers helping Indian companies grow, and set up businesses in Dubai?
MARL: One of our key objectives is to facilitate business opportunities into and from Dubai. Our international office in Mumbai ensures Dubai companies looking to trade in India and Indian companies seeking to trade in Dubai are assisted in every way possible, from business matchmaking and networking sessions to seminars and fact-finding missions.
Dubai International Chamber leads the Dubai Global initiative, which was launched by His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai. The main aim was to establish a powerful network of 50 representative offices across five continents by 2030. Supported by simplified customs processes, Dubai Global is the key to unlocking the emirate’s business benefits and enables foreign companies to leverage Dubai’s world-class logistics capabilities to open up new trade routes across the region and beyond.
The emirate’s strategic location at the crossroads of Europe, Asia, and Africa provides convenient access to regional and international markets, enabling Dubai to serve as a gateway for businesses looking to expand their global reach — when you come to Dubai, you come to the world.
Indian companies setting up in Dubai also benefit from the many advantages offered by a highly competitive business environment, including a favourable tax regime and regulatory framework, world-class infrastructure, attractive visa processes, and a wide-ranging government-driven business support ecosystem.
ET: Do you have any statistics on Indian companies registered with the chamber in the last year?
MARL: A total of 6,717 new Indian-owned companies signed up as members of the Dubai Chamber of Commerce during the first six months of 2023 alone, an year-over-year growth of 39%. This brought the total number of Indian member companies to more than 90,118, reflecting the key role Indian businesses play in supporting the sustainable growth of Dubai’s economy.
ET: SMEs are becoming a focus segment across the globe, how are Dubai’s initiatives helping such enterprises?
MARL: SMEs have always formed the backbone of the UAE economy, and these businesses boost economic growth in multiple ways. In fact, according to the Ministry of Economy, SMEs account for nearly 95% of all companies in Dubai, employ 42% of the workforce, and contribute around 40% to the emirate’s GDP.
With these figures in mind, it’s not surprising that nurturing these companies has emerged as a key priority for the government. SMEs have been placed at the heart of the agenda for economic diversification and will play a key role in achieving the Dubai Economic Agenda (D33) objectives of doubling the size of Dubai’s economy over the coming decade and reinforcing the emirate’s position among the top three global cities.
The Dubai Economic Agenda features more than 100 transformational projects, which will create exciting opportunities for SMEs and startup businesses across sectors. We remain committed to extending all support necessary to small businesses, from training in key business skills to business matchmaking, networking events, and trade missions in targeted markets.
One of the key initiatives to support entrepreneurship in Dubai is the Expand North Star event, one of the largest events of its kind for startups and SMEs. This year’s event brought together over 1,400 exhibitors and 1,000 investors at Dubai Harbour.
Startups and SMEs are also spearheading the UAE’s digital transformation, with the digital economy expected to double its contribution to national GDP to almost 20% over the coming decade.
We are fortunate that entrepreneurial Indian companies represent more than 30% of Dubai’s innovation-driven startup community.
ET: What percentage of Indian enterprises are part of the Dubai SME ecosystem? How do you see the trend growing?
MARL: Currently, Indian entrepreneurs comprise around a third of Dubai’s startup community. While based on our membership data around 22% of total new registrations during H1 2023 were businesses with Indian owners. Given the high number of SMEs in Dubai, the majority of our members fall within this category. We are confident the number of Indian enterprises will continue to grow.
According to data gathered by Dubai Chambers, opportunities exist to attract Indian companies to Dubai in key areas including agriculture, forestry, fishing, education, electricity and gas, real estate, manufacturing, the arts, entertainment, and professional, scientific and technical services. These sectors are where we anticipate seeing the strongest growth, alongside Fourth Industrial Revolution (4iR) industries such as AI, big data, the metaverse, and cryptocurrency trading.
The author was recently in Dubai at the invitation of the Department of Economy and Tourism, Dubai.
