Geographical and economic fragmentation is the greatest danger the global economy faces today and is prompting the drafting of new policies to boost economic integration, Abdulla bin Touq, the UAE's Minister of Economy, said on Tuesday.
Addressing the Confederation of Indian Industry Partnership Summit 2023 in New Delhi, Mr bin Touq said economic fragmentation was expected to cost the world dearly because “the greater the fragmentation of trade, the greater the economic costs”.
“I would like to reiterate that the UAE, as an active member of the global financial and trading ecosystem, supports global efforts aimed at promoting economic integration. We believe that it is absolutely necessary to address the economic challenges of our times and build a more sustainable and prosperous future for all,” he said.
He emphasised the role the UAE and India could play in enhancing economic integration.
“The UAE, as an active member of the global financial and trading ecosystem, supports global efforts aimed at promoting economic integration,” Mr bin Touq said.
The growing economic ties between the UAE and India support both countries’ efforts towards greater partnership, he said.
“India is one of the most vibrant economies in the world today and has a wealth of resources, expertise and innovative ideas. Similarly, the UAE’s strengths include its global status as a leading trade, investment and business hub, and a gateway to the Middle Eastern and African markets,” he said.
The UAE signed its first comprehensive economic partnership agreement with India in February last year, and it came into effect on May 1.
Benefits include enhanced market access, lower or eliminated tariff rules, simpler customs procedures, clear and transparent rules, and rules-based competition.
Trade between the UAE and India has increased by 10 per cent in the first year after the countries signed the treaty.
Non-oil trade rose to about $50 billion since the treaty was signed a year ago, putting it on track to achieve its goal of $100 billion by 2030, Dr Thani Al Zeyoudi, Minister of State for Foreign Trade, said last month.
The UAE is India's third-biggest trading partner while India is the Emirates’ second-largest trading partner.
India hopes its exports will hit $1 trillion in the near to medium term, Minister of Commerce and Industry Piyush Goyal has said in the past.
“The trade deal has cancelled or reduced customs duties by 90 per cent on goods and commodities traded between both countries … They cover nearly 95 per cent of the value of commodities that each country imports from the other, which will accelerate the growth of non-oil trade to amount to $100 billion per annum over the next five years”, Mr bin Touq said.
Apart from India, the UAE has signed similar treaties with, Israel, Indonesia and Turkey. The Emirates is working towards signing 26 comprehensive economic partnership agreements, Mr bin Touq said earlier this month.
Speaking at CII, the minister also said the UAE welcomed the strong presence of Indian companies in the country and “strives to provide them with all enablers for growth and expansion in our markets”.
The UAE government has adopted an array of measures that have enhanced the resilience of its economy in the face of global economic challenges such as volatile commodity prices, inflation, uncertainty with regard to monetary policies, as well as supply chain disruptions.
These include the granting of 100 per cent foreign ownership, the issuance of legislation to protect intellectual property and the launch of a strategy to attract talent and skills in all sectors to enhance the country's position as a permanent centre for creativity and innovation.
The forward-looking policies have enabled the UAE’s real gross domestic product to grow by 7.6 per cent in 2022, Mr bin Touq said.
Last year, foreign direct investment inflows to the country amounted to $171.6 billion. There was also unprecedented growth in the country’s non-oil foreign trade as it crossed the Dh2.2 trillion mark for the first time, with an annual growth of 17 per cent.