• Total trade across India-MENAT corridor to reach US$ 190 billion by 2030
  • Tier 1 cities are key drivers of India’s economic growth

Dubai- UAE: Investors and corporates in India and across the Middle East, North Africa and Türkiye (MENAT) are set for a decade of accelerated opportunity, according to a new report by HSBC. India-MENAT Corridor Outlook: Harnessing Natural Synergies considers the current state of trade and investment and the key growth opportunities between India and five countries in MENAT; Egypt, Qatar, Saudi Arabia, Türkiye and the UAE.

Patricia Gomes, Regional Head of Commercial Banking, Middle East North Africa and Türkiye (MENAT), HSBC Bank Middle East, said: “Buoyed by strong mutual interests, solid economic fundamentals and enduring historical ties, corporates and investors are looking at an extensive set of opportunities in both directions.” 

Indian corporates succeeding in the Middle East

The Middle East’s ambitious transformation plans, and the region’s youthful demographics – more than half of whom are under 30 years age – is attracting Indian investment, at pace. Data from the International Trade Centre (ITC) and HSBC analysis show an estimated US$61 billion export opportunity for India to ­the key MENAT markets, with top destinations including the UAE, Saudi Arabia and Türkiye.

India’s increasing strengths as a food and agricultural producer and exporter are re-positioning the India-GCC trade and investments relationship. Technology developments are transforming the GCC's food and agriculture industry, and considerable sums are being invested to promote food security; the India-UAE Food Corridor has seen over US$7 billion of investment since plans were initiated in 2019.

The Indian diaspora in the GCC is deepening regional capital, talent and technology ties. Around 8.8 million Non-Resident Indians now reside in the GCC, and represent the largest real estate investors in Dubai, overtaking British expats.

Outside of the GCC, India continues to do lucrative business in new areas of the economy with the other countries of the MENAT. In Egypt, Indian companies are investing in green hydrogen and electric vehicles, as well as in more traditional sectors such as food industries, chemicals, and tourism. India's automobile companies are also present in Türkiye, where Indian manufacturers have also poured investments into the packaging materials industry.

MENAT corporates making inroads in India

India’s strong economic fundamentals are attracting MENAT corporates expanding trading relationships overseas, with estimated export potential over US$51 billion from key MENAT countries into India.

Understanding India's expansive physical landscape is also helping MENAT corporates to narrow down their investment opportunities. Tier-1 cities are key drivers of India’s economic growth; just six of these eight cities contributed 28% of India’s GDP in 2022. However, India’s Tier-2 cities hold much potential too.

Gomes added: “India’s Tier-2 cities are an untapped opportunity for MENAT corporates considering lower operational costs, niches for specific industrial activities, or shifting ancillary operations.”

While India is still a close trading partner for the MENAT region in goods such as spices, gold, and textiles, the South Asian country is also rising in global prominence in manufacturing, technology, and science. India’s digital economy presents multiple opportunities for MENAT corporates, underpinned by strong growth forecasts from 0.5% share of GDP in 2010 to 13% by 2030.

Trade agreements hold further promise

The trade and investment relationship between India and MENAT are set to increase also because of free trade agreements.

 Ajay Sharma, Country Head of Commercial Banking, HSBC India, said: “As free trade agreements and bilateral agreements ramp up between India and MENAT countries, global supply chains are being reshaped, and trade policies for the green transition are adapted. Now is the time for corporates and investors along the India-MENAT Corridor to explore the latent potential for further collaboration.”

In 2022, the India-UAE Comprehensive Economic Partnership Agreement (CEPA) was negotiated and concluded in just 88 days, reducing or eliminating tariffs in over 80% of bilateral product lines. Meanwhile, the India-Middle East-Europe Economic Corridor (IMEC), announced in September 2023, is a further trade proposal which would connect the Middle East and Europe to India by new rail and shipping links.

Media enquiries:
Ahmad Othman
ahmadothman@hsbc.com

About HSBC in the MENAT region

HSBC is the largest and most widely represented international banking organisation in the Middle East, North Africa and Türkiye (MENAT), with a presence in nine countries across the region: Algeria, Bahrain, Egypt, Kuwait, Oman, Qatar, Saudi Arabia, Türkiye and the United Arab Emirates. In Saudi Arabia, HSBC is a 31% shareholder of Saudi Awwal Bank (SAB) and a 51% shareholder of HSBC Saudi Arabia for investment banking in the Kingdom.