India To Become MENA’s Top Trading Destination By 2030

India will remain one of the top trading corridors for the UAE, Saudi Arabia and Egypt, according to HSBC’s latest trade forecast report.

The report predicts that India will be the UAE’s top export destination by 2030, accounting for 14 per cent of its exports. The country will also be Saudi Arabia’s largest export destination by 2030, accounting for 18.5 per cent of its exports.

As the UAE continues to diversify from its mineral manufactures and invest heavily in its infrastructure, imports from India are predicted to rise.

According to the report, the growth in imports of infrastructure goods and investment equipment from India will significantly outstrip growth in other imports from 2013 to 2030.

The UAE is also India’s largest export market, accounting for around 10 per cent of total merchandise exports. The GCC member state is forecast to maintain this position until 2030 due to its growth in demand, the report said.

India’s trade relations with Saudi Arabia are also set to undergo major changes in the coming decades.

According to the report, Saudi Arabian exports to India will be extremely diversified in 2013. The biggest growth in exports from the Kingdom to India will be in chemicals, which will account for over 80 per cent of total exports between the two countries from 2013 to 2030.

The share of India’s exports to the Kingdom is also slated to increase by four per cent in 2030, ranking it the fourth largest export destination of the South Asian giant.

Key contributors to this increase will come from manufacturing, machinery and transport, and chemicals industries, the report said.

Saudi Arabia’s commitment to industrialisation and diversification will also offer opportunities to Indian investors in the Kingdom, HSBC said.

“With its huge population, rapidly growing middle class and capabilities in industrial and post-industrial sectors, India is a market with considerable potential,” said Tim Reid, regional head of commercial banking of HSBC Middle East and North Africa.

“The prospect of Expo 2020 in Dubai and other infrastructure projects in the region offer excellent opportunities for MENA businesses to bring the chance to benefit from India’s know-how into the region with new partnerships.”

“India’s strength in industrial and information technology can also help MENA businesses support the region’s political programme of economic diversification.”