India's exports to the UAE are anticipated to reach USD 50 billion by 2027, according to a report by the PHDCCI, as there is untapped potential between the two nations that is being explored by commerce and industry to increase trade volumes.
Bilateral and revealed comparative advantage (RCA) According to the industry body's analysis, revealed comparative advantage (BRCA) also points to significant untapped trade potential between the two nations.
India and the United Arab Emirates (UAE) signed the Comprehensive Economic Partnership Agreement (CEPA) in 2022.
In 2021, India-UAE commerce is expected to reach USD 69 billion, up from USD 60 billion in 2014. According to PHDCCI, the UAE's share of India's exports increased very marginally from 5.9% in 2014 to 6.4% in 2021.
Additionally, the consistent UAE contribution of India's exports and imports shows how crucial it is for both nations to boost their bilateral trade and investment, according to industry group PHDCCI.
In comparison to the UAE, where India ran a trade surplus from 2014 to 2017, India's trade deficit with the UAE began in 2018 and has continued to this day. According to PHDCCI, India's trade deficit with the UAE will be USD18 billion in 2021.
The UAE granted duty-free access to more than 97% of its products under the India-UAE trade agreement, which accounted for 99% of India's exports to the UAE. Saket Dalmia, president of PHDCCI, said in a statement that this will open up new opportunities for India and close doors for the rest of the Middle East, some of Africa, and Europe.
Around 90% of India's overall exports to the UAE came from its eight main export industries, which Dalmia listed as Stone and Glass, Fuels, Machinery and Electrical, Textile and Clothing, Metals, Chemicals, Transport, and Vegetables.
India exports the majority of its goods to the UAE in those product categories where it has a competitive advantage. India had five product categories in which it had a Revealed Comparative Advantage (RCA) in 2014, but this number has lately grown to eight, he said.
According to the industry group PHDCCI, a thorough analysis of bilateral revealed comparative advantage (BRCA) at the HS-6 digit level (roughly 3479 tariff lines) reveals that India has a bilaterally revealed comparative advantage in 276 tariff lines, which will account for 5.4% of the UAE's total imports (USD 15.26 billion/USD 275 billion) in 2020.
He added that India's significant trade potential with the UAE has yet to be completely fulfilled.
According to Dalmia, India's exports to the UAE are anticipated to reach USD 50 billion by 2027 along with a trade surplus due to the UAE's significant untapped potential and India's future economic possibilities.