India’s exports to UAE are projected at USD 50 billion by 2027 as there is an untapped potential between the two countries which is being explored by the trade and Industry to enhance the trade volumes, said Industry body PHD Chamber of Commerce and Industry (PHDCCI).
According to a study conducted by PHDCCI, bilateral trade between India and UAE has increased from USD 60 billion in 2014 to USD 69 billion in 2021. UAE's share in India’s exports has registered a very small increase from 5.9 per cent in 2014 to 6.4 per cent in 2021, said PHDCCI.
Further, the steady share of UAE in India’s exports and imports demonstrates the mutual importance for both countries to increase their bilateral trade and investment, said the industry body.
India had a trade surplus with UAE from 2014 to 2017 but the gap between exports and imports widened after that, resulting in a trade deficit for India from 2018 onwards till now. The trade deficit of India with the UAE stands at USD 18 billion in 2021.
Saket Dalmia, President, PHDCCI said, "Under the India- UAE trade agreement, UAE offered duty elimination on more than 97 per cent of its products which accounts for 99 per cent of India’s exports to UAE. This will create new avenues for India and open doors for the rest of the Middle East, parts of Africa and Europe."
India’s eight major export sectors to UAE that is stone and glass, fuels, machinery and electrical, textile and clothing, metals, chemicals, transport and vegetables contributed around 90 per cent in India’s total exports to UAE, added Dalmia.
Majority of India’s exports to UAE are in those product categories in which India has comparative advantage. In 2014, there were five product categories in which India had Revealed Comparative Advantage (RCA), but recently, the number increased to eight product categories.
"Going ahead, there is India’s large trade potential yet to be fully realized with UAE," said Dalmia.
In light of India’s large untapped potential with UAE, and considering its futuristic growth prospects, India’s exports to UAE are expected to touch USD 50 billion by 2027 along with trade surplus, said Dalima.