Indian companies set up units in UAE to offset impact of high US tariffs

A growing number of Indian companies are establishing manufacturing and trading units in the United Arab Emirates (UAE) to cushion the impact of steep US tariffs and take advantage of the Gulf nation’s investor-friendly tax regime.According to officials from the Ajman NuVentures Centre Free Zone (ANCFZ), nearly 45 per cent of the 6,500 companies registered over the past year are owned or operated by Indian entrepreneurs. “A lot of Indian businesses are setting up manufacturing in the UAE,” said ANCFZ CEO Rishi Somaiya. “Some companies, which rely heavily on exports to the US, have shifted their base to the UAE to remain competitive under the current tariff structure.”
The move comes as Indian exporters face a 50 per cent import tariff on most goods entering the US, compared to only 10 per cent on products imported from the UAE. This significant differential has prompted several Indian firms to explore production partnerships and relocation options to Gulf free zones, where they can also benefit from lower operating costs and easy access to regional and global markets.Somaiya cited the example of a manufacturing firm that now performs 70 per cent of its production in the UAE and the remaining 30 per cent in India, allowing it to meet the criteria for lower tariffs when exporting to the US.
Industry experts note that the UAE’s Comprehensive Economic Partnership Agreement (CEPA) with India, which came into effect in May 2022, has further streamlined the process for Indian investors to set up operations in the Emirates. The pact offers tariff concessions, simplified customs procedures, and greater market access, boosting two-way trade and investment.“The UAE government has been very supportive of Indian entrepreneurs. The CEPA has made it much easier for them to establish and expand their presence here,” Somaiya said.Located strategically near Dubai, the Ajman NuVentures Centre Free Zone aims to increase the number of registered companies to 10,000 by next year, with Indian firms expected to maintain a strong share. “Currently, about 45 per cent of our companies are Indian. We expect this proportion to continue as we grow,” Somaiya added.Sheikh Mohammed bin Abdullah Al Nuaimi, Chairman of ANCFZ, said the free zone offers a full spectrum of business setup services, including rapid license issuance, visa processing, and comprehensive administrative and legal support. “Ajman NuVentures Centre Free Zone introduces a new benchmark for entrepreneurial support by combining ease of setup, affordability, and world-class digital infrastructure,” he noted.The UAE’s strategic location, business-friendly policies, and network of trade agreements have positioned it as a preferred global hub for Indian enterprises looking to navigate international trade challenges and expand their global footprint.

(Business Correspondent)