Rise in India-UAE trade, time for SMEs to explore new markets

UAE's trade surplus with India rose to Dh2.2 billion during the first quarter this year from a trade deficit of Dh7.3 billion during the same period last year, according to a report released by the Ministry of Foreign trade.

The report attributed this positive change to the big increase of 273 per cent in the value of UAE non-oil exports that went up from Dh2.2 billion during the first quarter of 2009 to Dh8.4 billion this year. In addition, the value of India-bound re-exported UAE commodities rose by 162 per cent, going up from Dh4.4 billion to Dh11.5 billion during the same comparison period.

The report also revealed that there is a 83 per cent increase in the value of non-oil foreign trade between the two countries, going up from Dh20.5 billion to Dh37.5 billion. It is also expected that the value of commercial exchange between both countries will increase from Dh108 billion in 2009 to Dh120 billion in 2010.

In the report, it is also indicated that India is the UAE's largest trade partner, while the UAE is the number one trade partner for Indian exports, and second with regards to Indian imports, coming in second after China.

The figures in the report suggests that it's time for the Indian SMEs, already exporting to UAE to rejoice and celebrate the growing bilateral trade between India and UAE. Those SMEs which are still lagging behind and have not explored other potential markets should take a cue from the recent figures and try to find buyers and importers for their products in the UAE market.

Indian SMEs can make use of the online marketing tools, b2b portals as a medium to market their products, give maximum exposure & visibility at the global level and find prospective buyers and importers from other countries as well. This will not only cut advertising costs but also ensures maximum reach to the buyers.

The areas in which India’s exports to the UAE are well diversified include gems and jewellery, engineering goods, tea, vegetables, fruit, spices, meat and its preparations, rice, textiles and apparel and chemicals, besides RMG cotton including accessories, man-made yarn, manufacture of metals, fabrics and made-ups, marine products, machinery and instrument and plastic products.

The report also said that mot only in trade with India but in FDI also, UAE is considered the number one Arab country, and the 10th globally in terms of the overall value of Foreign Direct Investment inflows into India, preceded by Mauritius, Singapore, the USA, the UK, Holland, Japan, Turkey, Germany, and France.

The report predicted that the value of UAE investments in India will reach Dh6.9 billion by the year 2011. This was based on a survey of UAE investments abroad conducted by the foreign trade ministry that showed investments by UAE firms in India reached 5.7 billion dirhams.

It also said that the value of UAE investments in India, in light of the continuous development of economic and commercial ties between India and the UAE, will reach 6.9 billion dirhams by the year 2011.

The report also indicated that UAE investments in India have witnessed a steady increase over the past 10 years, from $1.6 million in 2000 to $257 million in 2008, reaching $629 million in 2009.

UAE investments in India were concentrated in five main economic sectors that took a 48.6 per cent share ($705 million) of the total value of these investments.

The energy sector received 19.1 per cent share of UAE investments in India (worth $264 million), followed by the services sector at 9.3 per cent ($143 million), programming and construction at 7.8 per cent ($115 million) and 6.8 per cent ($99.2 million) respectively, while tourism and hotels came in 5th place at 5.6 per cent ($84 million).