UAE is largest Arab investor country in India

The Department of Analysis, Commercial and Industrial Information at the Ministry of Economy (MOE) has released an analytical study on the reality of the Indian economy and the non-oil foreign trade between the UAE and India.

Along with featuring India’s salient economic indicators, the study contains economic, statistical and descriptive data on the movement of foreign trade and investment in India.

The study concludes that trade and investment sectors form the cornerstone of the booming bilateral economic ties between the UAE and India. As far as the direct foreign non-oil trade between the two countries is concerned, the study reveals a 21 per cent decline in the total value of bilateral trade exchange during 2014 as compared to 2013.

This, as the study points out, came as a result of the decline of the UAE’s re-export value by 33 per cent to $5.8 billion in 2014 from $8.6bn in 2013. National exports fell during the same period by 31 per cent while the country's imports from India declined by 12 per cent. The decline affected the balance of trade leading to a rise of deficit from $3.45bn in 2013 to $6.29bn in 2014.

On the UAE’s free zone trade (FTZ) with India, the study indicated that it saw a 16 per cent decline during 2014 as against 2013, which came as a result of the fall of the UAE’s free zones exports by 59 per cent from $738 million in 2013 to $304m in 2014. The UAE free zones re-exports fell during the same period by 28 per cent while free zones’ imports to the UAE from India dropped by 3.5 per cent. This adversely affected the balance of trade leading to a rise in deficit from $1.9bn in 2013 to $2.8bn in 2014.

UAE's non-oil exports to India in 2014 stood at nearly $5.3bn, with a decline of 31 per cent compared to 2013. Overall, 10 commodities accounted for 88.5 per cent of the total non-oil exports of the UAE to India. Different varieties of gold - raw, dust, and the semi processed - occupied 59 per cent of the total non-oil exports to India which stood at $3.16bn, down by 46.6 per cent compared to 2013. This was followed by ornaments and jewellery standing at $364m with an annual growth of 41 per cent, and by trade in copper wire with a total value of $319m and an annual growth rate of 26 per cent.

In terms of the UAE’s imports, India is the third largest trade partner of the nation with imports from India touching nearly $17.4bn in 2014 with a decline of 12.4 per cent from 2013. Ten commodities accounted for 67 per cent of imports from India during 2014. Various gold varieties dominated the list of the UAE’s imports from India with a total value of $4.6bn accounting for 26.4 per cent of the total UAE imports from India, with an annual decline of 1.5 per cent.

Diamond came in second with a total value of nearly $3.2bn, accounting for a 47 per cent downfall compared to 2013. Jewellery and ornaments occupied third spot with a total value of $2.1bn representing a growth of 30 per cent. It is notable that the UAE’s imports of wheat rose by 179 per cent.

The UAE's re-exports to India during 2014 fell by 32.8 per cent compared to 2013, with a total value of $ 5.8bn in 2014 as against $8.6bn in 2013. This was due to a decline of the UAE’s re-export of diamonds by 32.3 per cent, as well as precious stones and semi-precious stones by 73.3 per cent. Added to this was the decline of the UAE’s re-exports of silver in raw, dust, and semi-processed forms by 57 per cent. Re-exports of phones to India fell by 82 per cent. However, on the plus side, there was a rise of re-exports of hard drives and tapes by 6566 per cent. Re-export of diamonds alone accounted for $4.38bn representing 76 per cent of the total re-exports of the UAE to India.

The study revealed that the UAE is the largest Arab investor country in India accounting for 81.2 per cent of the total Arab investments in India and is ranked 11th in the world in terms of foreign direct investments in India. The total UAE investments in India amounted to $8bn, including $2.89bn in the form of direct foreign investments. UAE investments in India are concentrated in five sectors namely construction (16 per cent), energy (14 per cent), metallurgy (10 per cent), services sector (10 per cent), computer software and hardware (5 per cent). The other sectors include petroleum products, precious metals, gems and jewelry, minerals, chemicals, wood and wood products.

The study indicates that among the oldest national companies investing in India are DP World (which handles 34 per cent  of the total container terminals in India), Emaar MGF, which has emerged a leader in the Indian real estate sector, the Abu Dhabi Investment Authority (Adia), Abu Dhabi National Oil Company (Adnoc), Emirates Telecommunications Corporation (Etisalat), Abu Dhabi National Energy Company (Taqa), National Petroleum Construction Company, Emaar, Abu Dhabi Polymers Company (Borouge), Abu Dhabi Investment House, Dubai Investments, Dana Gas, Dubai Aluminum Company Limited (Dubal), Dubai Cables (Ducab), Abar Inc, Tecom Investments, Emirates Airlines, Etihad Airways, Flydubai, Air Arabia, Dubai Group, Sharaf Group, National Bank of Abu Dhabi, Emirates NBD, Abu Dhabi Commercial Bank, First Gulf Bank, Mashreq Bank, Rakeen, Ruwais Fertilizer, and RAK Ceramics.

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