UAE's non-oil sector is 74 per cent of GDP; small industries crucial: UAE economy minister in India

As India's third largest trading partner, the United Arab Emirates (UAE)is exploring various non-oil sectors in which both nations can further trade ties. Specifically, the domains of advanced manufacturing, logistics, supply chain, renewable energy, food processing, drones, and space technology, are being looked at.

A delegation led by UAE's Economy Minister Abdulla bin Touq Al Marri is on a visit to the Indian city ofChennai and met the Chief Minister ofTamil Nadu,MK Stalin on Thursday (Jul25).

The ministers discussed avenues for investment and creating job opportunities. The meeting was also attended by M A Yusuf Ali, an influential Indian-origin entrepreneur who is based in the UAE.

Yusuf Ali is the Chairman and Managing Director of the Lulu group, which is said to employ the largest number of Indian diaspora.

Speaking at the 'InvestopiaGlobal' event, organised by the Confederation of Indian Industry (CII),Al Marri said that the UAE has made a name for itself, offering many services in industriessuch as logistics, finance, and technology.

The people-to-people ties between the UAE and India are another important aspect of our relationship, he said.

"The non-oil sector accounts for 74% of UAE's GDP. It's the first time that the UAE has reached this figure of 74% of GDP coming from non-oil sectors," Al Marri added.

He also mentioned that the India-UAE trade had grown by 15 per centsince the signing of the Comprehensive Economic Partnership Agreement (CEPA) between the two nations, in the year 2022.

Prior to CEPA, the trade between the two countries was at $50 billionand following the pact, it has grown to nearly $70 billion, he stated.

Emphasising the importance of Small and Midsize Enterprises (SME), Alia Abdulla Al Mazrouei, UAE's Minister of State for Entrepreneurship said that the SMEs in UAE today represent 94 per centof total companies,contribute 40 per cent tothe country'sGDP and account for 42 per centof employment.

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"We are keen to enhance the contribution of the SMEs sector to the trade and economic exchanges with India. Our goal is to transform over 20 UAE startups into unicorns by the year 2031. We strive to raise the number of SMEs in the UAE to 1,000,000 in line with the 2031 vision, which has set the national goal to double the GDP to reach AED 3 trillion by then,"she said.

Referring to the increasing trend of Venture capital investments in the UAE, she said, "In 2021, the UAE set a new record in venture capital investments, attracting AED 4.3 billion in funding for startups – a whopping 93 per centY-o-Y growth. More recently, in the first half of this year, the UAE attracted USD 225 million in VC funding."

She urged both the UAE and Indian SMEecosystem stakeholdersto take advantage of this opportunityto explore productive partnerships and the available opportunities in both markets.

Tamil Nadu's Industries Minister TRB Rajaa expressed confidence that the state's electronics exports, already the highest in the country, will touch the $12 billionmark in the ongoing financial year.

In the previous financial year, the state achieved $9.6 billionworth of electronics exports, which is more than the combined electronics exports of Karnataka and Uttar Pradesh.

In 2023-24, Tamil Nadu alone accounted for 30 per cent of India's electronic exports. Uttar Pradesh, Karnataka, Gujarat, and Maharashtra are also key contributors in boosting India's fast-growing exports of electronic goods.

Smartphones form the bulk of India's electronic exports, and the leading markets that receive them are the United States and the UAE.

According to Indian government data, since the financial year 2020-21, the US has remained the primary destination for India’s electronics exports. Its share in India’s electronics exports has surged in recent years. From just around 15-20 per cent between the FY 2017-18 and FY2021-22, the US' share surged to 24-34 per cent in the last two financial years.

Generally, India’s exports are dominated by engineering goods, followed by petroleum products, gems and jewellery, and electronics goods.