The UAE ranked 14th with an overall score of 76.9 points in the 2021 index of economic freedom. Whereas among the Middle Eastern and North African countries, it ranked 1st. It ranked as the 28th largest economy with a 414 billion (or 43005 US dollars per capita) GDP in the world. The UAE has increased its import and export capabilities with time. Currently, the UAE economy stands in 3rd place in the Middle Eastern countries with a GDP of 501 billion US dollars in 2022.
Now, surprisingly, Dubai’s main economic source of income is not petroleum products but rather tourism. The UAE’s imports are greater than its total exports. Dubai’s imports and exports don’t comprise only oil and petroleum products. One-third of its trade includes gold, diamonds, cars, and broadcasting equipment
Dubai’s Miraculous growth
Dubai is one of the largest and most rapidly growing economies in the world. Why does Dubai have this much growth and attention from all around the world? For this, you first need to know some facts about Dubai.
Firstly, the Dubai government has established Trade Free Zones (TFZ). These zones facilitate traders and businesses from every corner of the world. We know Dubai for its imports, exports, and especially re-exports. All this is possible because of the development of TFZs within the region.
Secondly, Dubai’s strategic location connects the west to the east. There is potential for every business holder to take their place in the market. Exporters send goods from every corner of the world to re-export.
Thirdly, Dubai’s government plans to increase its trade capacity. It offers pro-business environments to external companies, issuing them work permits and other facilities. It plays an important role in supply chain management.
Business and trading strategies
The Jebel Ali is the largest and busiest port in the Middle East and the world’s 7th busiest container port. Traders from China, India, the USA, Australia, and other countries export or re-export through this port. They have easy access to most of the business opportunities under one roof. Trade-free zones allow foreigners to run their businesses legally. Outside these trade-free zones, only Middle Eastern-owned businesses can work, and citizens can establish and run businesses and trade.
You can sell your products or goods directly to established importers in the market. This is the best and most straightforward route to start rooting in the market, but not for the long term. There is another way you can cooperate with an already-established importer to enter the Dubai market. These agents and distributors are far more reliable in terms of long-term business, especially for small businesses.
Imports/Exports of UAE
The UAE imports from many countries around the world. China is the biggest import partner of Dubai with $41B, India is 2nd with $18.1, the US is 3rd with $14B, Saudi Arabia has $9.21B (4th), and Germany has $7.81B(5th). The following is the list of main imported items:
- Gold ($38.4B)
- Broadcasting equipment ($20.4B)
- Refined petroleum ($9.15B)
- Diamonds ($8.11B)
- Cars ($6.63B)
The UAE is also one of the biggest importers of boats and tobacco processing machinery in 2020. The UAE e-commerce sales have increased from $5.05B to $27.08B within eight years (2015-22).
Trade Agreements and Relationships with other countries
The UAE is a member of the Gulf Cooperation Council (GCC) and has trade agreements with its partner countries. The main objectives of the GCC are a common market, a common currency, and mutual customs goals. The UAE also signed a trade agreement with the United States under the US-GCC agreement for marketing, business, and technical cooperation. The UAE also has free trade access with middle eastern countries under the Greater Arab Free Trade Area Agreement (GAFTA). According to the UAE Federal Customs Authority (FCA), to further increase the UAE’s imports and exports, it has signed agreements with the Islamic Republic of Pakistan, Argentina, India, Azerbaijan, Algeria, Republic of Kazakhstan, South Korea, Maldives, Armenia, and the Kingdom of the Netherlands. The UAE has trade relations with the European Union and signed an FTA in 2009.
Import clearance process at UAE’s port
The documentation required to clear customs of imported shipments is as follows:
- Packaging list
- Delivery order
- Certificate of origin
- Commercial invoice
- Airway bill/ Lading bill
- Letter of duty exemption (From the Ministry of Finance)
- Certificate of health (for food-related)
- Original Certificate of halal slaughter (for food products)
Export Clearance Process at UAE’s Port
The following documentation is required to clear exported shipments at the airport or seaport:
- Packaging list
- Export invoice
The export procedure is more complex than the import process. All you need to provide is the original documents of the shipping company and the authorities will help you get customs permission.
The UAE wishes to expand its trading domain far into the future. They have the necessary means to do it. They have the routes, infrastructure, bulky investments, and other resources to make it happen.
The UAE is a rising trading hub for business, finance, and trading, with e-commerce as its new feature. The government provides a friendly and politically stable environment, with many other incentives for companies. Dubai’s economic potential will continue to grow and it will remain the central hub for economic and marketing trades.