DP World’s Jebel Ali port, free zone act as trade catalyst in boosting UAE-India non-oil trade

UAE-based logistics giant DP World’s Jebel Ali port and free zone (Jafza) is playing a significant role in boosting the volume of non-oil trade between the UAE and India and creating new business opportunities for Indian companies through access to a seamless and efficient logistics solution.

Last month, the UAE Ministry of Economy confirmed that bilateral non-oil trade volume reached $50.5 billion in the first 12 months since inking the Comprehensive Economic Partnership (CEPA), with the two nations on track to meet the $100 billion non-petroleum trade target by 2030. Economic partnerships such as CEPA, along with initiatives like DP World’s India-UAE Trade Bridge, have contributed to the significant increase in Indian companies’ confidence in expanding their reach to global markets through Jebel Ali, say experts.

Access to DP World’s global portfolio for end-to-end logistics and supply chain solutions as well as the unparalleled multimodal connectivity have only enhanced the attractiveness of Jafza to Indian businesses, particularly those in key sectors like food and beverages, manufacturing, and healthcare.

Role of Jafza in boosting India-UAE non-oil trade

Over the past year alone, there’s been a 30 per cent increase in the number of new company registrations from India at the Jebel Ali free zone. Much of this is thanks to a slew of trade initiatives, agreements, and incentives that have boosted the confidence of Indian companies looking to expand their operations and reach global markets via Dubai and its free zones.

JAFZA

“India and the UAE have shared a close relationship for many years. Our vision and goals are common – to create a self-reliant and sustainable market. In alignment with the UAE government’s strategy, we, at DP World, look forward to driving the success of India’s revolutionary ‘Make in India’ initiative, while helping the emirate of Dubai retain its position as a leading trade hub and India’s gateway to newer, larger markets,” said Abdulla Bin Damithan, CEO & Managing Director - DP World UAE & Jafza at ‘The India-UAE Bridge; Dubai – India’s Gateway to the World’. DP World’s initiative, the India-UAE Bridge, was launched three years ago and integrates its assets in Jafza, India, and around the world to enhance trade and efficiency across borders.

Jafza – which currently serves a total of over 9,500 companies from 140 countries – has been successful in attracting global companies by offering tax exemptions, 100% foreign ownership, and other business-friendly incentives, while also streamlining customs procedures, reducing bureaucratic red tape, and improving ease of doing business as well as making it easier to import and export goods.

Today, more than 1,200 leading Indian companies including leading Indian businesses like Tata Steel, Mahindra & Mahindra, L&T, and Reliance Industries, among others are registered at the Jebel Ali free zone and serve key markets around the region through the hub. In fact, the Jafza-India route handles 19 per cent of non-oil trade between the UAE and India, making it India’s largest supporting ecosystem for trade.

Through DP World’s Jebel Ali port and free zone, Indian businesses now have greater access to global production and manufacturing value chains in the UAE as well as to newer markets in the Africa and Asia regions. By enhancing market access, businesses face lower foreign investment risk, thus making it easier and more attractive for companies and investors to trade internationally.

“DP World’s key offering towards this (i.e., boosting UAE-India non-oil trade) is the ‘India-UAE Bridge’, an initiative that will integrate our assets and capabilities to enhance trade values for both nations. We also have the India Traders Market under development and the new Agri Terminal’s capabilities, which will all help India’s trade with the world,” said Abdulla Bin Damithan, CEO & Managing Director - DP World UAE & Jafza.

As part of the Dubai Traders Market initiative, Bharat Bazaar – Jafza’s mega-distribution centre with its showrooms and warehouses – will allow Indian traders to serve local and global customers from a single hybrid business platform for wholesale and retail via the free zone, explained a DP World spokesperson.

DP World free zones, ports in India

In addition to DP World’s Jafza and National Industries Park free zones in the UAE, three free trade zones in India – one each in Mumbai, Chennai, and Cochin – are currently under development.

DP World’s Mumbai Free Trade Zone will be developed across 18 hectares at JNPT’s special economic zone, a key gateway hub handling about 5 million TEUs a year, roughly 20 per cent of Indian container traffic.

The Chennai free trade zone, which will be developed across 50 hectares and located just 25kms from DP World’s strategically located container terminal, will add vital logistics and infrastructure facilities on India's east coast, while the facility at Cochin will boast sea, land, and rail connectivity.

There has also been heavy investment in infrastructure projects, including the development of Jebel Ali Port, which is the largest man-made port in the world. Jebel Ali port handled 14 million TEU in 2022, a rise of 1.7 per cent compared with 2021 levels, a steady growth from pre-pandemic levels.

DP World’s market share in India’s ports sector is estimated at 28 per cent. DP World had said that it would invest up to $3 billion through its joint investment platform with India’s National Invest Infrastructure Fund to create leading logistics infrastructure in India. Recently, DP World also won a major concession to develop, maintain and operate a mega container terminal at Deendayal port in Gujarat.

“The two nations are already on course to hit $88 billion in trade this year,” said Sultan bin Sulayem, Group Chairman and Chief Executive of DP World, at the India-UAE Partnership Summit. “India represents a significant landscape for opportunity. As the value chain becomes more integrated, significant growth opportunities exist across the entire Indian ports and logistics space,” Sultan bin Sulayem added.

Path to UAE-India non-oil trade target of $100B

Earlier this year, to mark the first anniversary of CEPA, the two nations established the UAE chapter of the UAE-India Business Council (UIBC) on February 18, 2023, to further bolster economic ties and facilitate bilateral trade and investment.

“This marks a significant moment in the deepening of the relationship between the United Arab Emirates and India…. The Council will play a critical role in supporting the two governments in their joint mission to boost bilateral trade and investment… It will serve as a catalyst for innovative collaboration between our two great nations," said the UAE Minister of State for Foreign Trade HE Dr. Thani bin Ahmed Al Zeyoudi at the launch of the UAE chapter in Dubai.

The UAE chapter of the UAE-India Business Council (UIBC) is expected to play a vital role in ensuring the two regions meet their goal of increasing non-oil bilateral trade to $100 billion and of India attracting $75 billion in investments from the UAE.

The UAE’s non-oil foreign trade crossed the 2 trillion-dirham mark in 2022 for the first time, representing a 17% growth from 2021 levels. India’s non-oil imports from the UAE have increased by 3% since the bilateral trade agreement was implemented last year, signaling there is significant room for optimism, going forward.

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