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Atul Aneja

Poised for exponential growth, India and the United Arab Emirates (UAE) are rediscovering each other as valued economic partners. Indian companies are arriving in the UAE in droves as the country has already positioned itself as a major global destination of trade, investments and services.

As India develops at a feverish pace, its appetite for energy is also growing dramatically. This has begun to show in the rapidly evolving relationship between New Delhi and Abu Dhabi. According to information provided by the UAE Ministry of Information and Culture, India is now ahead of Japan as “the leading export market for Abu Dhabi’s refined products, absorbing over half (of) its gas-oil exports as well as substantial volumes of kerosene and LPG.”

Indian trade with the UAE is expanding at an astounding pace. Non-oil trade routed through Dubai has risen by 336 per cent over the last five years. India’s Consul General to Dubai, Mr Venu Rajamony, says that based on data provided by Dubai Customs, total trade between Dubai and India, covering a period of 5 years, from 2002 to 2006, soared from $2.5 billion to a high of $10.9 billion! Total non-oil trade between India and the UAE is now estimated at $18 billion.

Exports from India to Dubai in the year 2006 stood at $6.4 billion, while imports into India from Dubai had scaled the $4.5-billion mark. In 2006, Dubai imported diamonds worth $1.3 billion from India, signalling that items of jewellery, precious metals including gold and platinum contribute substantially to the basket of non-oil trade with the UAE. The thriving trade relations between India and Dubai also showed up starkly in the data provided by the Dubai Government Department of Tourism & Commerce Marketing (DTCM). India had become Dubai’s largest export destination ahead of Pakistan, Iran and Kuwait. India also provided the largest number of investors to the UAE in the first half of 2006. Statistics provided by the Department of Economic Development of the Government of UAE revealed that 1,152 investors had arrived in the country from India. India’s interest in shoring up business ties with UAE is also evident from the fact that from about 85,000 companies registered with the Dubai Chamber of Commerce and Industry, around 11,200 are Indian partnership companies. Indian firms have also moved in a big way to the Free Zones set up in the UAE in order to take advantage of the liberalised business environment that prevails there. For instance, from the 5,500 companies operating in the giant Jebel Ali Free Zone in Dubai, 600 have come from India.

One-third of the companies registered with the Ras Al Khaimah Free Trade Zone, have an Indian tag. Nearly 60 per cent of the firms operating in the Al Hamriya Trade Free Zone in Sharjah are Indian.

Indian public sector undertakings (PSUs) are also making their mark in the UAE. Nearly 22 Indian PSUs have moved to the country. These include Air India, Indian, BHEL, NTPC, Indian Oil Corporation and National Small Scale Industries Corporation. Bank of Baroda is the only Indian bank to offer the entire range of banking services in the country. However, many prominent Indian banks, including Canara Bank, Punjab National Bank, State Bank of India, Export Import Bank, Andhra Bank and State Bank of Travancore, have established representative offices and tied up with the local exchange companies in the UAE.

The New India Insurance Company and Oriental Insurance Company have a presence in the region. Life Insurance Corporation International and LIC Housing Finance Ltd also have a representative office in Dubai. The Tea Board of India, based in Dubai is steering the sale of Indian tea in UAE and the region.

Another institutional mechanism that promotes business ties between India and the UAE is the Joint Business Council (JBC). The JBC establishes a link between the UAE Chambers of Commerce and Industry and the Federation of Indian Chambers of Commerce and Industry.

The ETA Star Group is a trusted corporate entity in the Middle East. A highly diversified, multidimensional organisation, its activities cover over 15 broad industry verticals with each vertical having a host of businesses.

The group employs over 54,000 people and has a network of 140 offices in over 22 countries worldwide. The group’s turnover for the year ended 2006 was in excess of $4 billion.

Recently, Sundaram Business Services, the business process outsourcing arm of the Chennai-based Sundaram Finance Ltd, and the Dubai-based ETA group have formed a joint venture company to tap the BPO business in the Gulf region.

The ETA Group’s Property Development division is building a Rs 500-crore IT park on the Old Mahabalipuram Road. The first phase of the 4 million sq ft building is ready, and the building would be leased out to IT companies. The company is also building a residential property, called Gardens, in Bangalore at a cost of Rs 300 crore.

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