Indian companies turn to the UAE to avoid Trump tariffs
- 23 de set. de 2025
- 3 min de leitura
Indian exporters are increasingly moving operations to the UAE to sidestep steep US tariffs.
Exporters set up in UAE free zones
Full manufacturing operations
Textiles and jewellery top list
“The shift has started,” said Faizal Kottikollon, chairman of the UAE chapter of the UAE-India Business Council. “It’s huge already.”
In August, President Donald Trump signed an executive order introducing an additional 25 percent duty on imports from India, doubling the effective tariff on many categories of goods to 50 percent.
The White House cited India’s continued energy trade with Russia as the impetus for the move, calling it a matter of national and economic security.
Scott Cairns, managing director of Creation Business Consultants in Dubai, said he had seen an almost 40 percent increase in inquiries from Indian investors since the latest US tariff hike.
“These inquiries have primarily come from the trade, manufacturing, healthcare and pharmaceutical sectors, all seeking establishment in both free zones and mainland areas,” he said.
To preserve access to their largest overseas market, Indian companies are increasingly viewing the UAE as a low-tariff manufacturing and re-export hub. The Gulf nation faces significantly lower US duties, typically around 10 percent, making it a viable jurisdiction to meet “rules of origin” requirements that allow goods to qualify for favourable tariff treatment.
Companies are exploring final-stage manufacturing, assembly, finishing, packaging and distribution operations in the UAE. These facilities can help businesses meet the US threshold of up to 40 percent local value addition required to reclassify goods as Emirati in origin, said Kottikollon.
“They are coming to Jebel Ali and Sharjah free zones and setting up facilities quickly to achieve this value addition, which is mostly the last-mile side of production,” said Kottikollon. “They bring the semi-finished goods and finish them over here [in the UAE].”
He said textiles and jewellery would be the main industries to move. “They can set up very quickly and we see growth in these two sectors.”
Building work on the Bharat Mart trading hub at Jebel Ali free zone (Jafza) is due to begin later this year. The facility is expected to increase trade between the UAE and India by almost one-third, said Kottikollon, when it comes into operation in the first quarter of 2027.
“Bharat Mart is truly going to be a game changer in terms of our MSME [micro, small and medium-sized enterprises] sectors, our small businesses getting an opportunity to become large exporters,” said India’s minister of commerce and industry, Piyush Goyal, at the end of a two-day visit to the UAE last week.
He revealed there have been more than 9,000 expressions of interest in locating to the area.
The hub will cover 2.7 million square feet and have 1,500 showrooms when fully ready. Jafza is already home to over 2,300 Indian companies.
The UAE and India signed a comprehensive economic partnership agreement in 2022 with a view to expanding non-oil bilateral trade to $100 billion annually by 2030.
Figures from the UAE-India Business Council for the first half of 2025 show non-oil bilateral trade reached $37.6 billion, almost 34 percent up on the same period last year.
The UAE ranks as India’s third-largest trading partner and second largest export destination, with exports over $36.6 billion in the 2024-25 financial year.
India ranks as UAE’s second largest trading partner, with exports of over $63.4 billion over the same period.
By Gavin Gibbon
September 23, 2025, 2:21 PM
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