The UAE has a dynamic economy, which is diversifying quickly as it aims to transform itself into a knowledge economy through strong reform efforts under the UAE 2050 strategies. The UAE's openness to international business and strategic location as a gateway to the region has boosted trade and integration in global value chains and further attracted Foreign Direct Investment (FDI).The UAE's economy recovered significantly, expanding by 7.5% in 2022 after the Covid-19 crisis. However, in subsequent years, amidst the disruption of the pandemic and current economic environment, resulted in a decline in GDP decline (3.6%) in 2023. The country anticipates a GDP growth to reach 4% in 2024.
The UAE stands out as one of the promising market for Indian Exporters in the Middle East and Africa region, due to its forward-looking outlook and ambitious vision. On the 2023 edition of the U.S. News & World Report, the UAE secured the 17th position among 87 of the world's best countries, leading in the movers sub-ranking, which evaluates nations' potential for economic advancement. Additionally, UAE ranks 11th in the power sector.
The energy sector plays an important role in shaping the UAE's internal and external policies. To meet the rising demand in a sustainable manner, the UAE is focusing on coming up with a balanced energy mix. Through continued efforts, UAE is focusing on developing local expertise in these important technologies and fostering international cooperation and resource conservation. This expansion will enable Indian exporters to capitalize on these emerging opportunities across UAE.
The UAE ranks among the top five export destinations for India's engineering industry, standing as the largest within the WANA region. The India-UAE CEPA has made a significant impact on India's Bilateral Trade with the UAE and particularly India's Exports to the UAE. From 2019-20 to 2023-24, Indian exports to the UAE surged from USD 28.9 billion to USD 35.6 billion. UAE's imports of engineering goods from India also witnessed a significant uptick, soaring to USD 5.9 billion in 2023-24 from USD 4.4 billion in 2019-20
The product profile of Automechanika consists of Parts & Components, Electrics & Electronics, Connectivity & Autonomous Driving, Accessories & Customising, Tyres & Batteries, Car Wash, Care & Detailing, Oils, Lubricants & Fuels, Diagnostics & Repair, Body & Paint, Digital Solutions & Services and other related products.
In auto-components sector, India's exports to UAE stood at USD 291 million in 2024-25, which is 29.2% greater than the same period last year. India's share in UAE's import basket in auto components sector is around 2.6% and it ranks within the top 10 suppliers to the UAE.
UAE 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 (MENA) region. Additionally, Dubai being home to significantly higher income class is also a significant market for automobile. Ease of doing business conducive policies, available industrial space and geographical location have also driven these companies to settle in Dubai. Given this background, UAE has the potential to become one of the most sought after market for Indian auto component manufacturers and the FTA has paved the way further. Hence events such as Automechanika Dubai are extremely important for the Indian auto part exporters.