UAE Achieves AED 2.2bn Surplus in Trade Balance with India

A report released by the Ministry of Foreign Trade on the commercial and investment ties between the UAE and India, has revealed a positive shift from a deficit during the first quarter of 2009 worth around AED7.3 billion (Approximately US$1.97 billion) to a surplus in the UAE's favour during the first quarter of 2010 worth AED2.2 billion or around US$599 million.

The report, which was conducted by the Analysis and Trade Information Department at the Ministry, attributed this positive change to the big increase of 273% in the value of UAE non-oil exports that went up from AED2.2 billion during the first quarter of 2009 to AED8.4 billion, in addition to the increase in the value of India-bound re-exported UAE commodities by 162%, going up from AED4.4 billion to AED11.5 billion during the same period.

The report revealed that a large 83% increase in the value of non-oil foreign trade between both countries from AED20.5 billion to AED37.5 billion.

The report affirmed that these indicators reflect the strength of existing bilateral ties between the UAE and India and the strength of the UAE's economy and its development that are seen as a direct result of the implementation of the country's policy and strategy of increasing economic openness, and its execution and establishment of a free market policy, a diversified economy, and increasing the UAE's non-oil exports in order to increase their contribution to the GDP.

The report also indicated that India is the UAE's largest trade partner, while the UAE is the number one trade partner for Indian exports, and the second trade partner with regards to Indian imports, coming in second only after China.

The report expects the value of commercial exchange between both countries to increase from AED108 billion in 2009 to AED120 billion in 2010, especially that commercial ties between both countries witnessed steady and noticeable growth during the past five years, which was also boosted by the signing of a framework agreement on economic cooperation between India and the GCC states in August 2005.

The report also revealed that the UAE is considered the number one Arab country, and the 10th globally in terms of the overall value of Foreign Direct Investment inflows into India, preceded by Mauritius, Singapore, the USA, the UK, Holland, Japan, Turkey, Germany, and France.

This was based on a survey of UAE investments abroad conducted by the Ministry of Foreign Trade that revealed that the investments of a group of large UAE companies in India reached AED5.7 billion up until the year 2009 constituting 1.4% of overall global foreign direct investments into India.

The report predicted that the value of UAE investments in India, in light of the continuous development of bilateral economic and commercial ties between India and the UAE, will reach AED6.9 billion by the year 2011.

- WAM