Foreign investments are growing, Dubai is becoming a leader among countries for India in attracting FDI.

The total value of foreign direct investment (FDI) in the United Arab Emirates (UAE) in 2022 amounted to $22.7 billion, representing a 10% increase or $2 billion compared to the previous year, according to the World Investment Report 2023 published by the United Nations Conference on Trade and Development. The UAE ranks first in attracting FDI in both Western Asia and the Middle East and North Africa (MENA) region, accounting for over 41% (Western Asia) and 32% (MENA) of the total FDI in these two regions. In 2022, the country ranked 16th in the world in terms of FDI inflows, reflecting the efforts made to attract investments from around the globe.

The inflow of FDI in Dubai

The inflow of FDI into Dubai has significantly increased compared to the lows caused by the Covid-19 pandemic in 2020 and 2021. According to the Dubai Foreign Direct Investment (FDI) Department, the inflow of FDI into Dubai grew by 80% in 2022 compared to the previous year. The total number of FDI projects in 2022 reached 1,173, which is 89% more than the 619 projects in the previous year. Today, Dubai has become one of the main choices for FDI from India.

The role of FDI in the economic growth of Dubai

FDI plays a significant role in the economic growth and development of Dubai. One of the points of the D33 program is to increase the level of FDI to 60 billion dirhams per year between 2023 and 2033. Based on current trends, the emirate is on track to achieve this goal.

FDI also contribute to the diversification of Dubai's economy, with investments in sectors such as real estate, tourism, finance, technology, and logistics. Foreign investments also facilitate the transfer of technology and knowledge, ultimately enhancing local capabilities and competitiveness. Furthermore, FDI leads to business expansion and the creation of new enterprises, resulting in job creation.

Strategic partnership between India and the UAE

India and the UAE have always had strong bilateral relations. Last year, the two countries signed a Comprehensive Economic Partnership Agreement (CEPA), outlining the vision for the India-UAE strategic partnership. In the financial year 2022-2023, trade between India and the UAE exceeded $84 billion. In 2022, the UAE became India's second-largest export market, while India became the UAE's second-largest trading partner.

Due to its location and infrastructure, Dubai serves as a gateway to the Middle East and North Africa (MENA) region and other global markets for many Indian companies. With its favorable business environment, government support, and developed financial and logistics sectors, many Indian companies have established and expanded their operations in Dubai.

The importance of the Indian diaspora

Thanks to its favorable business environment, advantageous tax regime, and attractive investment opportunities, Dubai attracts a multitude of investors and entrepreneurs. However, one of the key factors contributing to the influx of investments from India is the presence of a large Indian diaspora in Dubai. According to data from the Indian embassy, the Indian community makes up 30% of the UAE's population. The large Indian community in Dubai fosters cultural and economic exchange and integration. It acts as a catalyst for business relations between India and Dubai.

Overall, the influx of FDI from India to Dubai highlights the strong ties and strategic partnership between the two countries, as well as Dubai's appeal as a global economic hub. Dubai continues to evolve and attract investments, thanks to its favorable business environment, infrastructure, and commitment to strengthening its economy.