India – Key Economic Partner Of Dubai – Non-Oil Trade Through Dubai Rises 336% In Five Years
26 February, 2007

In a Press conference in Dubai on February 26, 2007, the Consul General of India, Mr Venu Rajamony said that India was already a key economic partner of Dubai and the relationship looks poised to strengthen even further. The trade between UAE and India has diversified and rapid economic growth of the Indian economy has made it an attractive destination for investments from UAE. Indian companies have become more robust and confident with the rapid economic growth and are entering Dubai and Northern Emirates in larger numbers. Dubai is increasingly an important transshipment point and logistic hub for the Indian goods.

He said, according to Dubai Customs statistics the total trade between Dubai and India over a period of 5 years, from 2002 to 2006 has increased from US $ 2.5 Billion to US $ 10.9 Billion reflecting an increase of 336%. Over 80% of the trade between India and UAE is routed through Dubai. For the calendar year 2006, the total Non-Oil trade between India and Dubai was US $ 10.9 Billion. Export from India to Dubai in the year 2006 was US $ 6.4 Billion. Import into India from Dubai was US $ 4.5 Billion.

According to the figures released by the Dubai Government Department of Tourism & Commerce Marketing (DTCM), India has emerged as Dubai’s largest export destination ahead of Pakistan, Iran and Kuwait. However, China leads as the top exporter to Dubai followed by India. On the re-export front, India was second after Iran as destination of re-exports from Dubai.

In the year 2006, major imports from India to Dubai was of Diamonds valued at US $ 1.3 Billion. In fact, top five commodities comprised of Diamonds, Articles of Jewellery, Platinum, Gold and Scrap of Precious Metals. In the year 2006, of the total exports of US $ 4.5 Billion from Dubai to India, US $ 1.2 Billion comprised of Gold. The top five commodities exported from Dubai to India were Ferrous Waste & Scrap, Aluminium Waste & Scrap, Copper Waste & Scrap and Paper Waste & Scrap.

The Department of Economic Development of the Government of UAE issued 8,318 licences during the first half of 2006 for different entities and businesses. The maximum number of foreign investors in the first half of 2006 came from India, with 1,152 investors. The statistics reveal the continuing interest of Indians in this country. Of about 85,000 companies registered with the Dubai Chamber of Commerce & Industry, around 11,200 are Indian partnership companies. Indians have also invested to take advantage of more liberalized environments of the Free Zones set up by Dubai and Northern Emirates Governments. The Jebel Ali Free Zone in Dubai, which is the largest has over 600 Indian companies of 5500 companies that are operating there. 30% of the companies registered with Ras Al Khaimah Free Trade Zone, are of Indian promoters. Al Hamriya Trade Free Zone at Sharjah has 60% of its companies from India.

22 Indian Public Sector Undertakings (PSU) are operating in UAE and have offices in Dubai. Recently, General Insurance Company opened a full fledged branch in Dubai to fill up the gap in the re-insurance business. These PSUs include Air India, Indian, BHEL, NTPC, Indian Oil Corporation and National Small Scale Industries Corporation. While Bank of Baroda is the only Indian bank to have operational activities in UAE, many prominent Indian banks like Canara Bank, Punjab National Bank, State Bank of India, Export Import Bank, Andhra Bank and State Bank of Travancore have representative offices and tie-ups with the local Exchange companies. The Tea Board of India has been promoting the sale of Indian tea in UAE and the region. New India Insurance Company and Oriental Insurance Company have been doing insurance business in the region. Life Insurance Corporation International and LIC Housing Finance Ltd., have representative offices. The Consulate recently held a group meeting of the Heads of the PSUs to improve coordination so as to work out solutions for their common concerns and to give a fillip to their economic activities. The Consulate intends to convene such meetings from time to time.

In last two months, two important economic Departments of Government of India had their Ministers visit Sharjah, Dubai and Ras Al Khaimah. In the first week of January, 2007, Mr. Prem Chand Gupta, Minister for Company Affairs attended Indo-Arab Conference at Sharjah held to strengthen trade and economic links. Mr. Subodh Kant Sahay, Minister for Food Processing Industry visited Dubai on 21st-22nd February, 2007 to promote investment opportunities in India in the food processing sector. A delegation from the Plywood and Wood Product Industry visited Dubai in the first week of February, 2007 to hold buyer-seller meet and promote trade relating to this industry. A delegation led by APEDA participated in the Gulf Food Show held in Dubai recently.

Economic and commercial cooperation between India and UAE and in particular, Dubai has been a historical fact. With rapid economic growth in India and in Dubai, the bilateral relationship is poised to gain in strength even further.