India has long been regarded as a key trading partner of the United Arab Emirates (UAE), handling almost 10% of its non-oil trade. India is also the world’s biggest importer of goods and services from the UAE, purchasing around 15% of all exports from the Arab state. As UAE is India’s leading trading partner within the Middle East, it’s predicted that the value of these import and export exchanges could reach as much as $100bn per year by the turn of the next decade.
Within a recent report on trade and economic links between India and the UAE, the latter’s Ministry of Economy has suggested further strengthening bilateral relations and establishing a new range of joint ventures between the two nations. Regardless of the fluctuations of the current gold rate, gold in its raw, semi-fabricated or powdered form amounted to almost three-fifths (59%) of all 2014 exports to India that were not related to the oil industry in any way. The value of this trade alone was worth a reported $3.16 billion. More than two-thirds (67%) of all Indian imports from the UAE in 2014 related to ten commodities, including diamonds and jewellery.
Despite the maintained bilateral trade of commodities between the two countries, the report claims there was a 21% fall in the value of all trade in 2014, compared with the previous year. This decline is one of the main reasons why the Ministry of Economy has called on a renewed focus on cementing trade relations. India is the second largest foreign investor in the UAE, funding $5.7 billion in 2013. Meanwhile, UAE’s investment in the Indian economy equates to more than four-fifths (81.2%) of all Arab investment in the Republic.
The report acknowledges the sizeable leap in trading relations between India and the UAE since the Framework Agreement on Economic Co-operation between India and the Gulf Co-operation Council (GCC) in 2004. Countries within the GCC now take more than a tenth (11%) of all India’s overseas exports and that figure is only going to rise. At the time of the report, India was regarded as the world’s seventh-biggest national economy, with a GDP of $2.182 billion in 2015, based on World Bank data. That equates to year-on-year GDP growth of 6.4%. It is certainly pleasing to see that the Republic of India has successfully negotiated the troubled waters of the global recession and maintained its economic prosperity; thanks largely to its increased industrial output and a minimized dependence on exports.
In February, Indian Prime Minister Narendra Modi made only his second state visit to the UAE, as part of a four-nation tour. Modi met with Shaikh Mohammad Bin Zayed at the new Presidential Palace to discuss a number of Memoranda of Understandings (MoUs). Key agreements were signed during PM Modi’s visit, including India’s agreed role in oil exploration throughout the UAE, plans for a new pan-India agricultural online trading platform and the establishment of a new Indian Institute of Management (IIMA) extension centre in Dubai – the first to be founded outside of the Republic of India.