Indian businesses are navigating one of the most dynamic phases of global trade in decades. On the one hand, exporters face rising tariff barriers in key markets, particularly the United States. On the other hand, the Government of India has introduced new incentives to help exporters remain competitive, including duty cuts, tax refunds, and large-scale promotion schemes.
Amid these shifts, the United Arab Emirates (UAE) has emerged as a strategic hub for Indian businesses seeking to expand globally. With its world-class infrastructure, investor-friendly policies, and advantageous trade agreements, the UAE provides a bridge between East and West. For Indian exporters, manufacturers, and service providers, this dual support—from the Indian government at home and the UAE’s business ecosystem abroad—creates a unique moment to consider international expansion.
This article explores why the UAE is being seen as the natural partner for Indian businesses, the legal and regulatory considerations that matter, and the opportunities available across key sectors.
India’s Export Incentives: A Strong Policy Push
The Government of India has responded to global trade pressures with a robust package of measures aimed at sustaining export competitiveness:
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- Duty-Free Cotton Imports: To support India’s textile and apparel sector, the government has extended the exemption on import duty for raw cotton until December 2025. This measure effectively eliminates an 11% duty burden, reducing input costs for exporters who are already grappling with tariff pressures in major markets. By keeping cotton affordable, the policy helps garment manufacturers manage margins, secure orders, and retain their global market share. In tandem with export incentives like RoDTEP and the Export Promotion Mission, this relief measure is intended to stabilize one of India’s most labour-intensive industries.
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- Export Promotion Mission (EPM): A ₹25,000 crore initiative spread across six years (2025-2031), introducing schemes such as Niryat Protsahan and Niryat Disha to expand market access. Introduced in the 2025–26 Union Budget, the Export Promotion Mission (EPM) is designed to help Indian exporters stay competitive. Led by the Department of Commerce, it focuses on improving access to export credit, supporting MSMEs in overcoming global trade barriers, and promoting diversification into new markets. By easing finance and compliance challenges, the EPM is expected to strengthen India’s role in global trade.
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- Reinstated RoDTEP Benefits: Reinstated in mid-2025, RoDTEP is India’s flagship mechanism to refund hidden taxes and duties that are not otherwise reimbursed under existing programs. These include embedded costs such as electricity duties, mandi fees, and fuel taxes, which directly affect the competitiveness of Indian exports. By issuing transferable electronic scrips, the scheme benefits a wide range of sectors including textiles, pharmaceuticals, chemicals, automobiles, and agriculture. The reinstatement of RoDTEP reflects the government’s recognition that exporters need stronger tools to offset cost disadvantages in overseas markets, especially at a time when tariff barriers are rising globally.
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- Jewellery Sector Relief: In 2025, the Indian government raised duty drawback rates on gold jewellery exports, increasing the reimbursement from approximately ₹4,468 to ₹5,234 per 10 grams. This step was introduced to ease the financial strain on exporters facing steep U.S. tariffs of up to 50% on Indian jewellery. The higher drawback rates directly reduce the net cost of exporting and provide additional liquidity for manufacturers. As jewellery is one of India’s top export earners, this adjustment is critical to sustaining competitiveness in global markets. Combined with trade facilitation opportunities in hubs like Dubai, the policy creates scope for Indian jewellers to expand strategically into the Gulf and beyond.
Together, these measures are designed to help Indian businesses reinvest in capacity, modernize supply chains, and explore new overseas markets.
Read more on India’s Export Incentives
CEPA: A Game-Changer in India–UAE Trade
The Comprehensive Economic Partnership Agreement (CEPA) between India and the UAE has fundamentally reshaped trade flows between the two countries. CEPA provides significant customs duty benefits, simplified rules of origin, and streamlined customs procedures, directly enhancing the competitiveness of Indian exports routed through the UAE. For details, read more about India-UAE CEPA on the UAE-India CEPA Council, Eithad Credit, and Deloitte Middle East web portals.
Indian businesses in sectors such as textiles, gems and jewellery, pharmaceuticals, and engineering goods are already experiencing tangible benefits from CEPA. The agreement is also stimulating bilateral investment flows, making joint ventures and manufacturing collaborations increasingly attractive.
Explore India–UAE CEPA Customs Duty Benefits
The UAE Advantage as a Manufacturing Gateway
For businesses aiming to serve global markets, the UAE offers distinct advantages:
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- Geography and Connectivity: Positioned at the crossroads of Europe, Asia, and Africa, the UAE provides access to two-thirds of the world’s population within an eight-hour flight.
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- Diversification of Risk: By relocating or extending production to the UAE, Indian companies can mitigate the risks of high tariffs in markets like the U.S., while tapping into new geographies.
For sectors like textiles, electronics, and agribusiness, the UAE serves as both a staging ground and a re-export hub.
Read more on UAE as a Manufacturing Gateway
Opportunities for Joint Ventures and Partnerships
The UAE’s business ecosystem encourages partnerships between local firms and foreign investors. Indian businesses considering expansion can benefit from:
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- Joint manufacturing facilities in free zones.
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- Distribution partnerships leveraging the UAE’s global re-export networks.
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- Shared investments in technology and innovation, particularly in sectors like renewable energy, logistics, and fintech.
Such collaborations not only reduce entry risks but also enable Indian businesses to integrate quickly into the UAE market.
Read about Partnerships and JVs between UAE and India Businesses
Sector Focus: Jewellery and Gems
The jewellery and gems sector is a clear beneficiary of UAE expansion. India is the world’s largest exporter of cut and polished diamonds, and Dubai is a leading global gold trading hub. With increased duty drawback rates at home and lower tariffs when routed through the UAE, Indian jewellers are strengthening their footprint in Dubai and beyond.
Recent acquisitions, such as Titan’s stake in Dubai-based Damas, highlight the sector’s momentum in using the UAE as a platform for global competitiveness.
Read more on Jewellery and Gems Trade Opportunities
Sector Focus: Textiles and Apparel
Indian textile exporters are facing rising costs due to global tariff barriers. The duty-free import of cotton in India provides some relief, but to truly scale globally, many are considering partial production or distribution hubs in the UAE.
Free zones like RAKEZ and KIZAD provide specialized facilities for textile and apparel companies, offering competitive advantages in reaching Europe, Africa, and the Americas.
Read more on Textiles and Apparel Expansion
Company Formation in the UAE: Legal and Regulatory Framework
Setting up in the UAE involves navigating a well-defined but diverse legal landscape, including choices between mainland, free zone, and financial centre jurisdictions. Each option offers different ownership rules, licensing structures, and regulatory frameworks.
Understanding these pathways is critical for Indian businesses planning expansion.
Read our detailed guide on Company Formation in the UAE
Financing and Investment Ecosystem
The UAE’s banking and investment environment is designed to facilitate cross-border trade and investment. From conventional banking facilities to Sharia-compliant finance and capital markets in ADGM and DIFC, Indian businesses have multiple avenues to secure financing for expansion.
Government-backed initiatives such as ADIO (Abu Dhabi Investment Office) also offer targeted support for sectors like agritech, renewables, and technology.
Read more on UAE’s Banking and Investment Framework
Future-Proofing Through UAE Expansion
Global trade is entering a period of greater protectionism and tariff competition. For Indian businesses, the UAE provides not just short-term tariff relief but a long-term strategy for resilience. By expanding operations into the UAE, companies gain:
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- Diversified access to global markets.
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- A hedge against tariff shocks in traditional markets.
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- A stronger platform for global branding and competitiveness.
Read more on Future-Proofing Indian Businesses
Robust policy at home; enabling environment in the UAE
Indian businesses today are supported by a robust policy framework at home and the enabling environment of the UAE abroad. Together, these factors create one of the most favourable moments for international expansion in decades.
The UAE is not just a gateway—it is a strategic partner for Indian enterprises looking to navigate global challenges and seize new opportunities. By aligning government-backed incentives with the UAE’s world-class infrastructure and trade agreements, Indian businesses can build a sustainable and competitive global future.
