Bharat Bazaar – the nomenclature may well lead you to imagine an Indian start-up facilitating trade opportunities in the rural market with specific focus on agri-products. However, Jebel Ali Free Zone (JAFZA), the world’s largest free trade zone operated by the global logistics giant DP World in Dubai, has now stumbled upon this term to kick-start a dedicated centre for trade of products made by Indian companies.
This was the major highlight of a presentation made by Abdulla Bin Damithan, CEO & MD, DP World UAE & Jebel Ali Free Zone (JAFZA), at a recently organised road show in Delhi. “A dynamic platform with a cluster approach like this will help the global buyers seeking Indian products to easily approach them and strike the deal,” Damithan later told Business India on the sidelines of the event.
JAFZA already boasts of a dedicated Chinese Bazaar in the complex and the India-specific platform will be second such offering. It is expected to get up and running within the next two years and, according to Damithan, it would be a key attraction for Indian enterprises, which already have a dominant position in the free zone. “Currently, Indian businesses make up 12 per cent of all enterprises in JAFZA, which has over 9,000 units. Indian enterprises have a major share of this free zone, which had done a cumulative transaction of over $150 billion last year. We are expecting more Indian enterprises to set up their trading base at our facility in the coming years,” he added.
JAFZA is offering a slew of benefits to Indian enterprises to set up their base which includes easy company registration process with licence, best in class logistics and supply chain solutions, a dedicated incubation centre for Indian businesses, etc. According to the company officials, an overseas entity can set up its business here at 60 per cent of the actual cost.
A crucial trading partner
The new offering is also expected to contribute in the fast-growing bilateral trade between the two countries, which has got a tremendous boost after the signing of the Comprehensive Economic Partnership Agreement (CEPA) last year. With this deal, India made it clear that it considers the UAE as one of the crucial trading partners over a long term. And since the implementation of CEPA (from 1 May last year), the spike in bilateral trade has been quite substantial. According to a Ministry of Commerce data, the trade between India and the UAE has touched historic highs during 2022-23.
Trade has increased from $72.9 billion (April 2021-March 2022) to $84.5 billion (April 2022-March 2023) registering a year-on-year increase of 16 per cent. During the CEPA Implementation period (from May 2022 to March 2023), bilateral trade increased from $67.5 billion (May 2021-March 2022) to $76.9 billion (May 2022-March 2023) – an annual increase of 14 per cent. During the same period, growth in India’s global exports was 5.3 per cent (excluding the UAE) – growing at 4.8 per cent.
“If somebody had talked about the bilateral trade between India and the UAE touching $100 billion a few years back, it would have looked almost impossible. But, now, we are within striking distance of that figure. While the bilateral trade is growing at a brisk pace, we are well-positioned to play an important role in it through our facility, the new cluster offering and the reach of DP World across the globe for the transaction of your goods,” Damithan pointed out.
“Our facility is used particularly by those companies from India and China, which are looking for a big-ticket opportunity in African continent in the medium-to-long-term,” he added.
JAFZA, which serves about 9,500 companies (including over 100 Fortune 500 companies) from 130 countries, is believed to have emerged as a magnet, especially for firms dealing in sectors like food & beverages (including grain, edible oil and sugar processing) bio-fuel processing, as also chemicals and petrochemicals. Apart from being strongly positioned as a leading international trade hub, the free trade zone is also acting as a vibrant bridge for the companies to connect with the GCC market, which has a non-food retail market size of over $150 billion.