Indian startups will benefit from the trade pact between India and the UAE, as the UAE serves as a stepping stone to expand further into the Middle East and North Africa. As bilateral trade reaches historic highs and tariffs are reduced, businesses are capitalizing on the UAE’s strategic position to tap into emerging markets.
Unlocking the UAE and beyond
The Comprehensive Economic Partnership Agreement, implemented in May, has significantly reduced tariffs on a vast majority of goods and granted zero-duty access to 90% of Indian exports. As a result, bilateral trade between India and the UAE has witnessed a remarkable year-on-year increase of 16%, reaching USD 85 billion in the April 2022-March 2023 period. The UAE India Business Council expects this positive trend to continue, bolstering economic cooperation between the two nations.
“The economic graph between UAE and India is going north,” Mukesh Kalra, the council’s head of business development, said 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.”
Gateway to the Middle East and North Africa
Indian businesses view the UAE not only as a target market but also as a gateway to the wider Middle East and North Africa (MENA) region. With the MENA region being an emerging destination for Indian companies, the UAE offers valuable access and growth opportunities. Companies like Klug Klug, an Indian tech platform for influencer marketing, have established offices in Dubai to facilitate expansion and capitalize on the rapid growth in the Middle East, including Saudi Arabia.
Future prospects in Saudi Arabia
While the UAE currently serves as the main hub and a gateway to the Gulf Cooperation Council (GCC) and African countries, industry experts anticipate Saudi Arabia to be the focus of future business endeavors. Rajeev Punj, director of Interlude Global Business, highlighted the abundance of opportunities in Saudi Arabia and envisions the next generation of Indian businesses strengthening ties with the kingdom. “I would say the next generation would be doing more business with Saudi Arabia,” Puni said. “Lots of opportunities are coming up.”
As Indian startups leverage the advantages of the UAE trade pact and establish a presence in the region, they are positioning themselves for sustained growth and market expansion. The strategic partnership between India and the UAE paves the way for increased economic synergy, setting the stage for Indian companies to further penetrate the Middle East and North Africa markets.
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