India to emerge the top export destination by 2030

Dubai: India is projected to overtake Japan as the top overall export destination of the UAE by 2030 according HSBC Trade Forecast.

The two largest export destinations for the UAE in 2014 — among the 25 HSBC Trade Forecast countries — were Japan and India, with a 11 per cent and 6 per cent respective share of exports. Japan remains an important trade partner for the UAE, especially for aluminium and crude oil, but its dominance as the top export destination will be gradually eroded as exporters seek more non-oil opportunities.

“India’s continued rapid pace of economic expansion drives a move to the top export destination. The longstanding commercial and cultural links with India support this, and the UAE plans to develop a high-skilled, knowledge base driving bi-lateral trade with India,” said Kwabena Ayirebi, Regional Head of Global Trade and Receivables Finance for HSBC Mena.

Meanwhile exports to China, which receives over 50 per cent of its oil imports from the Middle East, is projected to increase at around 10 per cent per annum from 2015-2030. As a result, China ascends from the fifth most important export destination in 2014 to third by 2030, displacing Korea and Singapore.

Exports of aluminium have been at the forefront of diversification strategies, with expansionary projects by state-owned Emirates Global Aluminium (EGA) helping to boost production capacity for the future. Unclassified goods, such as high value items (particularly gold, diamonds and jewellery) will also add around 12 per cent to export growth in the decade to 2030.

In 2014, transportation equipment was the biggest import sector, it is projected to be displaced by industrial machinery by 2030. In the run up to the World Expo 2020, industrial machinery imports are expected to be key in providing the necessary infrastructure.

The leading origin of UAE merchandise imports was China in 2014, which will remain through to 2030. “We expect the USA, India, Germany and Japan to remain the top four suppliers of UAE imports in the decade to 2030.

With the UAE’s plans for aggressive economic diversification, focused on creating a knowledge-based economy, plans to operate two “smart cities” in coming years and hopes of digital transformation, the country’s need to import new and innovative technologies will drive ICT equipment to become the second largest import sector by 2030.