• Thursday, July 25, 2024

Business

Future of India-UAE economic ties banks on manufacturing in Gulf state: executive

The official said they would support Indian firms at the highest level and work closely with government-backed bodies to set up factories in the UAE and begin manufacturing on its soil.

This photograph taken on February 6, 2024, shows employees working at Greenlab Diamonds, a firm manufacturing lab-grown gems on the outskirts of Surat in the western Indian state of Gujarat. (Photo by SAM PANTHAKY/AFP via Getty Images)

By: Shubham Ghosh

A SENIOR executive from a royal family office in the UAE has said its economic ties with India depends significantly on increased manufacturing within the Gulf state.

Zulfiquar Ghadiyali, managing director of Royal Arab Holdings, which oversees the business operations of the private office of  Sheikh Tahnoon bin Zayed Al Nahyan, one of the country’s top leaders, said efforts were being made to encourage Indian enterprises to establish manufacturing facilities in the Emirates, Arabian Gulf Business Insight (AGBI) reported.

“Indian companies must understand that there will be a time when the UAE will expect you to not just bring your goods here, but come and manufacture them here,” Ghadiyali was quoted as saying by the outlet.

Read: Julius Baer eyes wealthy Indians in Dubai with UBS, JP Morgan recruits

He also said that imports will become difficult, adding that Abu Dhabi eyes promotion of ‘Make it in UAE’.

Recently, Ghadiyali said at the India-UAE Business Forum in Dubai that Sheikh Tahnoon’s private office held discussions with Indian manufacturers to facilitate opening of factories.

Read: India, UAE business platforms join hands to enhance bilateral ties

“There are a number of benefits to take advantage of, with in-country value being the most important,” he was quoted as saying.

He also said they would support Indian firms at the highest level and work closely with government-backed bodies to set up factories in the UAE and begin manufacturing on its soil and take advantage of ‘Make it in UAE’.

Ghadiyali also said that some of India’s best manufacturers were in talks with them.

“Wherever there’s a shortfall, wherever there’s an escalation in cost, we are making it good through government subsidies and through our long-term investments, he added, according to AGBI.

in May, AGBI reported that the UAE will direct an extra AED23 billion ($6.3 billion) to the country’s manufacturers as it aims to diversify its economy.

As per Ghadiyali, leveraging the UAE as a base, Indian companies have the potential to step into the gap left by China in Africa. The move could help businesses bypass the trade finance limitations linked with direct trade between India and Africa, the report added.

Sheikh Tahnoon, one of the younger brothers of UAE president Sheikh Mohamed bin Zayed, holds the chairman’s positions in two major sovereign wealth funds of Abu Dhabi—Abu Dhabi Investment Authority and ADQ. Additionally, he chairs International Holding Company and the artificial intelligence and cloud computing group G42.

Despite a significant growth in bilateral trade, investments from India into Gulf countries have notably decreased in recent years.

Trade between India and the six Gulf Cooperation Council (GCC) states—Bahrain, Kuwait, Qatar, Oman, Saudi Arabia, and the UAE—accounted for nearly 16 per cent of India’s total trade last year, compared to the European Union’s share of 11.6 per cent.

However, despite the promising growth, cumulative foreign direct investment from India to the GCC plummeted from almost $10 billion between 2013 to 2017 to just over $5 billion from 2018 to 2022, AGBI cited Alpen Capital as saying.

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