India is set to overtake Japan as the UAE’s top export market over the next decade and half, according to a forecast by HSBC.
The bank, in its United Arab Emirates Trade Report, part of a biannual look at global trade patterns, said that India’s growing thirst for energy will see it become the UAE’s largest trading partner by 2030.
Other factors such as UAE’s drive to invest directly in India as well as to capture a greater share of the Asian tourism market will also propel trade growth between the two countries.
In 2015, Japan held a 6 per cent share of UAE exports, with India closely following with around 6 per cent.
India to be top importer by 2030
With regards to imports, India will displace China as the top importer by 2030 as its exports to the UAE grow 14 per cent a year in 2016-20 and then 11 per cent a year in 2021-30.
For services exports, while Saudi Arabia has traditionally been the UAE’s biggest partner in this space, it is anticipated to be eclipsed by India.
Exports in services to India are projected to grow at an average of 11 per cent a year, followed by Indonesia at 10 per cent and China at 9 per cent.
“Long-standing cultural and commercial links with India will be boosted by recent efforts to strengthen political ties,” the report said, apparently referring to the visit by Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, to New Delhi in February.
The UAE committed to invest up to US$75 billion in Indian infrastructure. This year, that has included an “anchor” investment stake in Mahanagar Gas, which is developing gas supply systems in Mumbai, plus a $150 million stake in Greenko, an India-based renewable energy firm.