A recent study says more than 2,000 flights fly across the United Arab Emirates (UAE) everyday. However, last week, the flight in which Indian Prime Minister Narendra Modi landed in Dubai international airport had changed the fate of Indian businesses wanting to do business there.
Indians in the UAE are the largest remitters globally and sent $12.64 billion to their country in 2014. India is the third largest source of tourists travelling to the UAE.
UAE and neighboring nations aren't new to Indian investments. The key reasons for investments in UAE according to many economists are lower costs for purchase and servicing of equipment, saving on energy costs, reduction of labor costs, decrease of transportation / logistics costs and tax optimization.
When importing equipment to Free Trade Zone in the UAE intended for the factory, no customs import fees or taxes are charged for the imported equipment and machines. In addition, due to low labor costs, the substantial part of production chain can be facilitated without the need of purchasing equipment – by taking advantage of the labour force.
Also, Dubai and other Emirates of the UAE offer energy resources at the most competitive prices in the world.
There are also researches that state companies and production facilities located in Free Trade Zones are exempt from income tax, VAT and withholding tax.
According to a Dubai Land Department (DLD) report in January 2015, foreign investments in Dubai's realty market by Indians amounted to AED 18.12 billion (Rs 3,035 crore) in the year gone by. Investments by Indians has surpassed those from other countries. Supportbiz reporter came across already some business owners who already has the outlet in UAE and they are planning to spread their empire more.
India-based P N Gadgil Jewellers, an 185-year-old organization, opened an outlet in Dubai this year. In an interview during 2014, P.N. Gadgil Jewelers had said the company had plans to expand the business by adding more stores across big cities of Maharashtra to cater to the needs of their customers. This company from Sangli has retail stores in many cities across Maharashtra along with the international presence in California. While asking about market officials said the market is better now as they made Salman Khan and Madhuri Dixit the brand ambassadors who are quite famous in Arab countries are attracting more clients.
When we asked Eresource Infotech as if opening an office/or outlet in UAE is a lucrative option, Vivek Jingade, Director Sales &Marketing, Eresource Infotech, said, "Opening our UAE office marks an important step towards our expansion plans. This also showcases the growth path that we are moving towards. Our strategic initiative to open an office in the region will help us to serve our customers very closely and actively thus making our objectives like Guaranteed On-Time Implementation and timely technical assistance more realistic".
Sudheer Nair, CEO, Eresource Infotech, added: "Today SMEs are also equally looking at more sophisticated application that will suit their business process and budget allocations. They feel these type of applications are necessary to streamline data transactions and improve their business processes Eresource ERP solution is customized to suit these SME requirements, which will ideally fit into their limited budget..”
Till date, Dubai has been known as the land to house Indians only as employees. However, post Modi-visit, the Arab nations are expected to have an equal number of business owners from India establishing their base there.