India and the Middle East trade corridor is expected to grow by 34% to become one of the world's fastest-growing by next year, UAE's minister of foreign trade has said.
"The India-Middle East corridor is expected to grow by 34% to emerge as one of the world's fastest-growing trade corridors by 2013," said the minister, Sheikha Lubna bint Khalid Al Qasimi.
"Given that it is the second-most populous country in the world with an enormous consumer base of over 1.2 billion, India is definitely among our priority partners moving forward," she said at the Third Arab-India Partnership Conference which got underway in Abu Dhabi on Tuesday.
According to India's foreign ministry officials, trade between India and the Arab world increased from $114 billion in 2008-09 to $144 billion in 2010-11.
She added that capital flows from the Gulf Cooperation Council (GCC) to India amounted to around $2.6 billion from April, 2000 to January, 2012, while India's FDI contribution to the GCC for the same period was at $2.4 billion.
The minister said it would be ideal for both the countries to ink a Free Trade Agreement to boost commercial partnership.
"To date, power, services and construction account for the majority of inflows from the GCC to India, which has emerged as one of our major sources of FDI.
"...it would be ideal for both our parties to reach a Free Trade Agreement that can further increase and expand our bilateral FDIs," she said.
The two countries should also work on initiatives to fully optimise business and investment partnerships, such as boosting the frequency of delegate visits, removing some non-tariff related barriers, and expanding trade beyond traditional exports and imports, she added.
"India is also the first trade partner of the UAE, with our bilateral exchange topping $144 billion last year," the minister said.
Over 40 leading Indian companies have established a presence here and almost all major Indian banks are represented locally, Sheikha Lubna said.
There are 500 weekly flights between the UAE and various Indian cities that has helped facilitate dynamic business ties as well, aside from encouraging more travel between the two countries, she added.
"We would like to encourage our Indian partners to consider investments and ventures with our more than 208,000 small and medium enterprises or SMEs which comprise almost 80% of the UAE's private sector," she said.
The conference is being organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) in association with India's ministry of external affairs, the Secretariat of Arab League and Abu Dhabi Chamber of Commerce and Industry.