Trade between India and the MENA region, including Turkey, through the India-Menat Corridor is poised to surge to $190 billion by 2030, driven by new investment prospects and expanding export opportunities, according to a recent HSBC report.
Trade Expansion Along the India-Menat Corridor
Trade across the India-Menat corridor is set to experience substantial growth, with projections indicating a surge to $190 billion by 2030, reveals a comprehensive report by HSBC. The corridor, linking India with the Middle East and Turkey, is witnessing burgeoning investment prospects and export opportunities, painting a promising picture for businesses in the region.
Opportunities for India and Menat Countries
HSBC’s report underscores an estimated $61 billion opportunity for India to enhance its exports to key Menat markets like the UAE, Saudi Arabia, and Turkey by 2027. Conversely, Menat countries stand to gain export potential worth $51 billion, aiming to expand their presence in international markets. Notable markets for India include the UAE, Saudi Arabia, and Turkey, offering substantial export potential.
“Buoyed by strong mutual interests, solid economic fundamentals and enduring historical ties, corporates and investors are looking at an extensive set of opportunities in both directions,” said Patricia Gomes, regional head of commercial banking, Middle East North Africa and Turkey at HSBC Bank Middle East.
Strengthening Trade Ties and Investment Flows
India is actively forging trade and economic alliances with GCC nations and other Middle Eastern countries, seeking to diversify economies beyond oil dependency. The Comprehensive Economic Partnership Agreement signed with the UAE in 2022 is poised to elevate non-oil trade to $100 billion by 2030. Furthermore, Indian companies are venturing into diverse sectors in the Middle East, including green hydrogen, electric vehicles, and packaging materials.
“India’s increasing strengths as a food and agricultural producer and exporter are repositioning the India-GCC trade and investments relationship,” the report said.
Emerging Opportunities in the Digital Economy
The report identifies burgeoning opportunities in India’s digital economy, with forecasts indicating a significant contribution to the country’s GDP by 2030. Sectors such as software as a service, FinTech, e-commerce, and health technology offer promising prospects. Notably, entities like Mubadala Investment Company are already investing in India’s digital sector, reflecting growing interest and potential collaboration avenues.
Unlocking Potential in Tier-2 Cities
India’s Tier-2 cities present untapped opportunities for Mena corporates, offering advantages like lower operational costs and niche industrial activities. Cities like New Delhi, Bengaluru, and Chennai, along with Tier-2 counterparts including Coimbatore and Jaipur, showcase potential investment hubs. As India’s digital landscape evolves, Tier-2 cities emerge as focal points for strategic investment and business expansion.
“India’s Tier-2 cities are an untapped opportunity for Mena corporates considering lower operational costs, niches for specific industrial activities or shifting ancillary operations,” said Gomes.
The report can be found here.
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