India & UAE : Bilateral Trade

India is one of the largest trade partner for the United Arab Emirates (UAE) and the second largest supplier to UAE after China. Bilateral trade reached US$ 72.9 billion in 2021-22 from around 50 billion in 2017-18, however mainly due to rise in imports. A merchandise export to UAE is marginally behind the pre-pandemic level at US$ 28 billion. The India-UAE Comprehensive Economic Partnership Agreement (CEPA) is estimated to take bilateral trade between India and the UAE to US$100 billion by 2030.

Engineering trade: India & UAE

In engineering, UAE remains among the top three export destination for Indian engineering products with a share of around 5.5 percent in India’s global engineering exports. India’s engineering exports top UAE has increased over the years from US$ 4 billion in 2016-17 to US$ 5.6 billion in 2021-22, registering a CAGR of 6.6%. During 2021-22, India’s engineering exports to UAE recorded a growth of more than 74% over the previous year. Major engineering products exported to UAE from India include Iron and Steel, Ships, Boats and Floating Structures, Products of Iron and Steel, Electric Machinery and Equipment, Motor Vehicle/cars, Industrial Machinery for dairy, agriculture, food processing, textiles, paper, chemicals, etc.

In case of auto and auto components which is the focus product of Automechanika 2022, India’s export to UAE was US$ 453.9 million in 2021-22, registering a growth of 47.6% viz-a-viz 2020-21. In honour of the stable bilateral trade relations, India and UAE recently signed an FTA, a Comprehensive Economic Partnership Agreement (CEPA) which came into force from 1st May 2022.

Opportunity for Indian Engineering Industry

Dubai is home to the global leaders in the automobile market and is also a leading hub of automobile export and re-export especially in the Middle East and North Africa region. Additionally Dubai being home to significantly higher income class is also a significant market for automobile. Already a number of big auto and allied manufacturers have established themselves in Dubai to cater to the international and local demand. Ease of doing business conducive policies, available industrial space and geographical location have also driven these companies to settle in Dubai.

Given this background, Dubai has the potential to become one of the most sought after market for Indian auto component manufacturers and with the FTA it may become easier to export to the Dubai market. Hence events such as Automechanika Dubai are extremely important for the Indian autopart exporters.