UAE-In­dia trade may touch $100 bil­lion by 2020

The Pak Banker - - BUSINESS -

Trade be­tween the UAE and In­dia could be val­ued around $100 bil­lion in the next five years, given the tar­get of 60 per cent growth by 2020. Cur­rently, bi­lat­eral trade is worth $60 bil­lion.

Trade be­tween the two coun­tries is ex­pected to re­bound in 2016 and 2017 de­spite de­clines in trade val­ues in the last two years, ac­cord­ing to Mar­more Mena In­tel­li­gence, a re­search firm.

Trade had peaked to $74.45 bil­lion in 2012-13, was stag­nant at $59.54 bil­lion in 201314 and $59.61 bil­lion in 20142015. The re­search firm said the visit of In­dian prime min­is­ter Naren­dra Modi to the UAE and sign­ing of agree­ments re­lated to strength­en­ing trade as well cul­tural and de­fence ties may have a pos­i­tive im­pact on bi­lat­eral trade be­tween the UAE and In­dia.

As In­dia is fore­cast to be­come the UAE's top im­port and ex­port desti­na­tion by 2020, pol­icy changes are ex­pected from both sides that would have a pos­i­tive im­pact on trade re­la­tions. Both coun­tries have tar­geted to in­crease ex­ports by 60 per cent in the next five years by mak­ing fa­cil­i­ties for in­fra­struc­ture and us­ing their geo­graphic lo­ca­tions to in­crease trade. In­dia was the UAE's largest trad­ing part­ner in 2013, af­ter which both im­ports and ex­ports de­clined, mainly due to a re­duc­tion in de­mand for jew­ellery and pre­cious stones in In­dia and di­ver­si­fi­ca­tion of the UAE's im­ports.

The Novem­ber 2015 re­port by In­dia's min­istry of fi­nance, depart­ment of eco­nomic affairs, eco­nomic divi­sion, states that mer­chan­dise ex­ports and im­ports de­clined by 24.4 per cent and 30.3 per cent, re­spec­tively, in Novem­ber 2015 over Novem­ber 2014. Dur­ing April- Novem­ber 2015, mer­chan­dise ex­ports and im­ports de­clined by 18.5 per cent and 17.2 per cent, re­spec­tively.

The growth rate of GDP was at con­stant (2011-12) mar­ket prices for the se­cond quar­ter (Q2) (July-Septem­ber) of 2015-16 is es­ti­mated at 7.4 per cent as com­pared to the growth of 7.0 per cent in Q1 of 201516. Growth in the first half (H1) of 2015-16 works out to 7.2 per cent.

Over­all growth in the In­dex of In­dus­trial Pro­duc­tion, or IIP was 9.8 per cent in Oc­to­ber 2015 as com­pared to (-) 2.7 per cent in Oc­to­ber 2014. On a cu­mu­la­tive ba­sis, the IIP growth was 4.8 per cent for the pe­riod April-Oc­to­ber 2015-16 as com­pared to the growth of 2.2 per cent dur­ing the same pe­riod of the pre­vi­ous year. Man­u­fac­tur­ing sec­tor grew by 10.6 per cent in Oc­to­ber 2015 and 5.1 per cent in April-Oc­to­ber 2015. Eight core in­fra­struc­ture in­dus­tries grew by 3.2 per cent in Oc­to­ber 2015 as com­pared to growth of nine per cent in Oc­to­ber 2014. The cu­mu­la­tive growth of core in­dus­tries dur­ing April-Oc­to­ber 2015-16 was 2.5 per cent as com­pared to growth of 5.6 per cent dur­ing April-Oc­to­ber 2014-15.

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