Trade across India-Menat corridor expected to hit $190bn by 2030

Asia's third-largest economy offers export potential worth $51 billion for countries in the Mena region and Turkey looking to expand overseas, HSBC report says

India aims to boost exports to countries in the Middle East including the UAE and Saudi Arabia amid strengthening of trade ties. Courtesy DP World

Trade across the corridor linking India with the Mena region and Turkey (Menat) is expected to grow by 50 per cent to $190 billion by 2030 amid new investment opportunities, a report has said.

There is an estimated $61 billion opportunity for India, Asia’s third-largest economy, to boost exports to key Menat markets such as the UAE, Saudi Arabia and Turkey by 2027, HSBC said in the report.

It also offers export potential worth $51 billion for Menat countries looking to expand overseas.

Some of the main markets for India that have a high export potential include the UAE ($32 billion), Saudi Arabia and Turkey ($11 billion each).

“Buoyed by strong mutual interests, solid economic fundamentals and enduring historical ties, corporates and investors are looking at an extensive set of opportunities in both directions,” said Patricia Gomes, regional head of commercial banking, Middle East North Africa and Turkey at HSBC Bank Middle East.

India is looking to cement trade and economic ties with the GCC bloc, as well as other countries in the Middle East as they focus on the diversification of their economies away from oil.

In 2022, India signed the Comprehensive Economic Partnership Agreement with the UAE. The pact is expected to boost non-oil trade between the two countries to $100 billion by 2030, from $60 billion two years ago.

It is also part of the Middle East-Europe economic corridor that is expected to increase trade between New Delhi and other countries in the region.

Indian companies are investing in other countries in the Middle East amid the strengthening of ties.

In Egypt, Indian companies are investing in green hydrogen and electric vehicles, as well as in sectors such as food industries, chemicals and tourism, according to the report.

Indian manufacturers have also poured investments into the packaging materials industry in Turkey.

“India’s increasing strengths as a food and agricultural producer and exporter are repositioning the India-GCC trade and investments relationship,” the report said.

It added that the GCC was investing heavily to transform its food and agriculture industry to boost food security, which presents new investment opportunities for Indian companies.

The report also highlights growing opportunities in India for Menat countries, especially in the digital economy and in sectors such as software as a service, ­FinTech, e-commerce and health technology.

India's digital economy is forecast to account for 12 per cent to 13 per cent of the country's gross domestic product by 2030, from 0.5 per cent in 2010 and 4.5 per cent in 2022, providing new opportunities.

Companies such as Abu Dhabi’s Mubadala Investment Company are already investing in India’s digital sector. In 2020, Mubadala bought a 1.85 per cent stake in Reliance Industries' digital platform in a $1.2 billion deal.

Tier-1 cities such as New Delhi, Ahmedabad, Bengaluru, Mumbai, Chennai and Hyderabad, as well as Tier-2 cities including Chandigarh, Coimbatore, Kochi, Jaipur, Nagpur and Mysuru offer investment opportunities.

“India’s Tier-2 cities are an untapped opportunity for Mena corporates considering lower operational costs, niches for specific industrial activities or shifting ancillary operations,” Ms Gomes said.