India’s exports to UAE may double to $50 billion by 2027 PHD Chamber

India’s exports to the UAE are expected to reach $50 billion by 2027, as there is untapped potential between the two countries that trade and industry are exploring to increase trade volumes, said industry body PHD Chamber of Commerce and Industry (PHDCCI).

According to a study conducted by PHDCCI, the bilateral trade between India and the UAE increased from $60 billion in 2014 to $69 billion by 2021. The UAE’s share of India’s exports rose slightly from 5.9 percent in 2014 to 6.4 percent in 2021, the PHDCCI said.

Furthermore, the industry body said the UAE’s steady share in India’s imports and exports demonstrates the mutual importance of the two countries to increase bilateral trade and investment.

India had a trade surplus with the UAE from 2014 to 2017, but since then the gap between imports and exports has widened, causing India to have a trade deficit since 2018. In 2021, India will have a trade deficit of $18 billion with the UAE.

Saket Dalmia, President, PHDCCI said, “Under the India-UAE trade agreement, the UAE offers duty-free access to more than 97% of its products, which account for 99% of India’s exports to the UAE. This will open new avenues for India and the UAE. Others in the Middle East region, parts of Africa and Europe.”

Dalmia added that eight major Indian export sectors to the UAE, namely stone and glass, fuel, machinery and electrical, textile and clothing, metals, chemicals, transport and vegetables, accounted for around 90 percent of India’s total exports to the UAE.

Most of India’s exports to the UAE are in product categories in which India has a comparative advantage. In 2014, India had five product categories showing comparative advantage (RCA), but more recently, this number has increased to eight product categories.

“Looking ahead, India’s huge trade potential with the UAE has not been fully realized,” Dalmia said.

Given the huge untapped potential between India and the UAE and considering its future growth prospects, India’s exports to the UAE are expected to reach $50 billion by 2027, alongside a trade surplus, Dalima said.