NEW DELHI: The free trade pact signed with the UAE last year has opened the Emirati market for Indian companies, but it is not their final destination, businesses say, as they see it as a hub to expand further into the Middle East and North Africa.
The landmark Comprehensive Economic Partnership Agreement that came into force in May reduced tariffs on about 80 percent of all goods and provided zero-duty access to 90 percent of Indian exports.
Bilateral trade has touched historic highs since the signing of the agreement, registering a year-on-year increase of 16 percent to reach $85 billion in the April 2022-March 2023 period, according to Indian Ministry of Commerce data.
It will continue to increase further in the coming years, according to the UAE India Business Council, the official joint business chamber for promoting economic synergy between the two countries.
“The economic graph between UAE and India is going north,” Mukesh Kalra, the council’s head of business development, told Arab News in a recent interview. “Free economic zones, aggressive policies of attracting companies from India and other (regions) have been really pushed by the UAE in the last few years.”
It also offers access to the Middle East and North Africa, which are largely emerging destinations for Indians.
“The reason why the companies are moving to UAE is access to the MENA region,” Kalra said. “North Africa is still not a saturated market.”
Klug Klug, an Indian tech platform for influencer marketing, told Arab News that its recently opened office in Dubai aimed at helping it access the broader region.
“We know that the Middle East, including Saudi Arabia, is growing very quickly,” said Kalyan Kumar, the company’s co-founder and CEO.
“We have already got India covered, Southeast Asia covered, and it was a logical step to also cover the Middle East with Dubai as a base of operations. That would also allow us access to Western Europe and North Africa.”
Rajeev Punj, director of Interlude Global Business, a company specializing in merger and acquisition finance, said that having a UAE branch has been helpful in expanding business.
But while Dubai was for him currently the main hub and a “gateway to Gulf Cooperation Council and African countries,” he saw the future in Saudi Arabia.
“I would say the next generation would be doing more business with Saudi Arabia,” Puni said. “Lots of opportunities are coming up.”
Source: Arab News