UAE and Indian Economics Comparative Study

Executive Summary

It is becoming increasingly difficult to ignore the fact that contemporary economics keeps developing proactively. Therefore, importance of appropriate forecasts of the further development is high. In fact, forecasting of the potential tendencies is recommended to be based on a certain comparative analysis. Regarding that, the following paper focuses on the comparing and contrasting of Indian and UAE economies in order to distinguish the key trends in the development of world economy. Economies may develop in different ways, but the main principles can be traced in every single case so that the following study touches upon the most basic sectors of economy such as heavy industry, agriculture, transport, and communication.



Nobody would argue with the fact that economy of any country is not a stable phenomenon. Change is a natural process, but it is important to place the emphasis on the fact that community regulates and manages its economy so that acceptance of economy situation as it is cannot be regarded as an appropriate one. That is why observation of local or any foreign economies is essential for understanding the main principles of economys development. In fact, they are commonly applied to any political and social system so that certain tendencies can be traced in any countrys economy. Furthermore, comparison of two and more economies is also pivotal, especially regarding a need to forecast the future of both of them. Taking this point into consideration, it is necessary to compare two economies in order to reveal their key aspects and possible ways of development. Hence, the following paper focuses on the comparison and contrasting economies of the United Arab Emirates and India.

The following comparative study obtains data and evidence within last ten years with certain reference to the previous decades. This perspective is crucial for the following study as prediction of potential ways of development cannot be made without relation to the past and contemporary tendencies of the countries economies. The comparative study touches upon the key factors of national economy: heavy industry, agriculture, natural resources, infrastructure, foreign and governmental investments, and transport. These aspects should be regarded as independent variables for comparison and contrasting. In other words, they create a basis for making predictions regarding the future of UAEs and Indian economies. Having outlined the thesis and basic focuses of the comparative study, it is necessary to proceed on the next section.

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UAE Overview

With regard to the economy of the United Arab Emirates, it should be admitted that it evidently lacks infrastructure from the perspective of transport and communication. These sectors of economy are important as long as they create conditions for the improvement of internal logistics and supply chain management. This essential point for the internal trade of UAE since its trading capacity keeps widening. The development of transport and communication caused a new wave of incoming foreign investments so that infrastructure of UAE can accept various greening projects as feasible for implementation along its coastline. Needless to say, greening initiatives a caused by the governmental intention to increase environmental awareness of the citizens and avoid excessive power consumption. The latter perspective is becoming controversial for the sector of energy because UAE nearly run out of its natural resources such as oil and gas. In fact, this fact has certain implications.

It is becoming increasingly apparent that oil and gas comprise only 10% of UAEs export. As it has been already mentioned, the United Arab Emirates started facing a shortage of these resources. However, it is worth admitting that past export of these resources helped to create a meaningful economic and industrial basis, which keeps UAEs economy developing for several decades. To return to the subject of the resource shortage, the United Arab Emirates made a restriction on the export of gas and oil because of the already outlined reasons. Hence, heavy industry of UAE is paid a central attention nowadays as it produces high-scale technologies, machinery, and chemicals. As a consequence, a great role plays environmental concerns of the government. That is why development of green zones, parks, resort area, and etc. boosted enhancing such sectors as tourism and. real estate. Eventually, Unite Arab Emirates strives for integration of national economy for the further globalization.

India Overview

To speak about Indian economy, first of all it is necessary to mention agriculture. This sector manages to produce crops of rice, wheat, and other cultures of mass consumption. In such a way, India gathered 71. 8 million tons of wheat, 10. 6 of corn, 116. 6 of rice, and 24 of potato. In consequence, India utilizes farming and fishing regarding production of milk and several sorts of meat and fish. These products are mainly oriented at national consumption because of their relatively low prices. At this stage of the development, Indian economy was facing an evident lack of heavy industry. Instead, India launched a proactive mining of such resources as coal, oil, and iron ore. Therefore, the industry of manufacturing started its development. It can be explained by the fact that this sector utilizes cheap raw materials, which are delivered from national supply chains. However, this aspect leaves much to be desired since transport and communication do not address the demand of Indian national economy.

Taking the latter point into consideration, it should be noted that India obviously lacks transport infrastructure. Therefore, this sector receives relatively high foreign and governmental investments. These funds are particularly aimed at the production of airplanes, tractors, railway equipment, engines, and other machinery. This period can be regarded as a beginning of heavy industry era in India. That sector is powered by national cheap coal so that sector of energy receives regular governmental contractual orders for work. As a result, increase in power consumption caused a need for creating more power stations. This need refers not only to coal-based power stations but implies initiating of nuclear powering the country. All in all, it is to be said that India keeps coping with is economic decline and makes considerable progress.


To start with, it should be admitted that UAE economy have not finished its total formation. Therefore, it requires certain development, especially regarding the sectors of transport and agriculture. It can be explained by the fact that the United Arab Emirates are located in desert area where construction of high-efficient traffic connections is comparatively hard. In addition, a proactive focus on gas and oil industries caused a deviation from the other sectors of the national economy. That is why development of transport infrastructure is particularly aimed at addressing internal purposes of UAE. What is more, greening projects are implemented with a long run purpose to create a basis for independent agricultural sector within the coastline of the United Arab Emirates. In such a way, UAE is planning to fill the gaps in its economy and solve the issue of environmental awareness among the citizens.

At the same time, the United Arab Emirates relies heavily on production of machinery, fertilizers, and other chemicals. Thus, heavy industry is the major factor concerning increase in power consumption. That created a need for development of new power stations, which should be environmentally-friendly as well. Hence, national heavy industry receives large governmental contractual works on a regular basis. Broadening of energy production sector is limited with environmental policies of the United Arab Emirates so that the majority of investments arrive from the government accordingly. It is possible to admit that UAEs economy develops regarding filling its obvious gaps and enhancing its already obtained strategic advantages.

By the same token, India seeks to the development of transport infrastructure for internal purposes. It can be explained by natural conditions of the country and high demand on the agricultural products to be delivered, stored, and traded. In the same way, development of transport and communication will help to diversify business in India since it is currently dependable on investments and external demand on the related products. Again, it is possible in terms of effective logistics and supply chain management so that Indian economy regards this factor as essential for its further existence. As a result, India receives foreign investments. It is worth saying that the requirements to returns on them are relatively simple as long as investors have to consider low-priced workforce. Hence, these investments are also oriented at elimination of poverty in India and increasing the value of human resource.

Likewise, heavy industry of India keeps developing. Provided that India is a member of BRICs and receives contractual orders from the government for enhancing infrastructure of transport, heavy industry of India is mainly based on production of planes, tractors, and manufacturing chemical materials. In such a way, a share of agriculture was equal to 18% in 2008. This tendency started in the end of the 80s and now it reaches its maximal extent. The following table depicts that tendency.

Therefore, it is possible to admit that Indian economy moves from agricultural orientation to the era of heavy industry. In the same way as in the United Arab Emirates, development of heavy industry caused a need for building new power stations. It is worth saying that India is planning not to limit its sector of energy production with coal-based plants only. Thus, several nuclear power stations will be built in terms of BRICs partnership.

All in all, it is to be said that both countries need to develop their infrastructures, especially its transport and communication. These developments will widen the other sectors of economy. What is more, logistics and supply chain management can be enhanced. In a similar way, the United Arab Emirates as well as India are facing increase in consumption of power. It can be explained by the fact that both countries are primarily focused on heavy industry, especially machinery, manufacturing, and chemicals. As a result, both countries need to increase a number of power stations accordingly. These initiatives are mainly supported with governments since they address the internal purposes of India and the United Arab Emirates. This is the main similarities between Indian and UAE economies so that it is necessary to switch on the discussion of their differences.


With regard to the differences between economies of UAE and India, it is worth saying that Dubai does not rely on the natural resources any longer. As it has been already mentioned, UAE runs out of its gas and oil resources. In consequence, the related exports comprise only 10% of shares. That makes the United Arab Emirates to switch on production of technologies, industrial equipment, machinery, tourism, and real estate. In other words, a need for opening new sector of national economy has become apparent. That is why a free economic zone was initiated. Needless to say, this aspect is related to creation of environment of free trade, foreign investments, and globalization of economy . In fact, it is a natural approach for the country, which performs at the level of macroeconomics. The growth of the foreign direct investments is clearly seen in the table below.


Actually, a high rate of foreign investments has certain implications so that they are worth discussion.

To speak about these peculiarities, high rates of foreign investments imply the fact that only 51% of business is owned by UAE citizens. At the same time, UAEs economy does not depend heavily at fluctuations of world currency so that it managed to establish its financial independence even though 49% of business is owned by foreign investors. Taking all these points into consideration, it should be admitted that the United Arab Emirates orient its economy, especially heavy industry, tourism, and real estate sector towards tendency of globalization. One may argue that it harms the value of the countrys national economy though. It is certainly to a particular extent, but it is essential to note trading in free economy zone is still focused on the related to UAE markets and supply chain. Consequently, the related industries import goods and services at relatively cheap price since none of the taxes are applied.

On the contrary, India mobilizes its economy regarding the increase in mining such natural resources as coal, oil, and iron ore. This growth can be explained by the mutually related development of heavy industry and consumption of power. To the largest extent, the rest of the national economys sectors demonstrated a growth in demands accordingly as long as the availability of more deliveries and storage started spreading across the country. Such awakening of the entire economy caused a flow of foreign investments, which are particularly attracted by low prices for coal mining, fishing, and chemical industry. It is becoming increasingly difficult to ignore the fact that India considers its natural resources as the basis for its heavy industrial future. Needless to say, India does not obtain such opportunities of development its infrastructure so that all investments are oriented at establishment of internal economic independence.

Taking this point into account, related revenues are utilized for restoring a social sector such as establishment of educational infrastructure and providing workforce well-being. The government supports these initiatives to the maximal extent because growth of human resources value implies a growth of Indian products and services at the key target markets and within terms of BRICs partnership . This strategy provides national economy with new job opportunities and creates a possibility of development small and medium private business. In such a way, Indian economy strives for capitalization on the basis of its natural resources, foreign investments, and relative success in heavy industry. It is an obvious fact that outcomes of this strategy are referred to the improvement of the internal well-being of the national economy and well-being of population while the United Arab Emirates keeps approaching the globalization and performance on the level of macroeconomics.

Eventually, the United Arab Emirates obtain less natural resources than India so that it keep widening the other sectors of economy, which can be utilized for the further export. Free economy zone attracts substantial foreign investments so that 49% of business belongs to the foreign companies. Simultaneously, UEA managed to establish financial independence so that its economy is not influenced by fluctuations of the world currency. Regarding that, the United Arab Emirates plans to create independent agricultural sector in order to address requirements of macroeconomics to a wider extent. Concerning India, it should be noted that it is tending to build its new heavy industrial economy on the basis of its natural resources and foreign investments. Hence, the majority of investments are directed towards creation of effective transport system since Indian heavy industry lacks this aspect. Moreover, social-oriented investing improves well-being of the key workforce. As a consequence, that means that value of Indian products and services will grow at target markets as well as its role within BRICs partnership. All expected benefits will be utilized for enhancing social sectors.


All in all, it is to be admitted that this paper has compared and contrasted economies of the United Arab Emirates and India. First of all, the paper has given a short description of economies regarding both countries. Then, the comparison has been conducted. It has become apparent that UAE as well as India share an intention to develop their infrastructure from the perspective of transport and communication. As a result, both countries receive substantial foreign and national investments. It can be explained by the fact that this sector presupposes improvement of logistics and supply chain management in terms of internal deliveries and trading. Thus, advance in transport and communication contributes much to the enhancing the other sectors of national economies of these countries. Further, the study has contrasted economies of India and the United Arab Emirates. It has been revealed that UAE does not rely on its national resources any longer as it is nearly run out of them. That is why export of gas and oil comprises only 10%. On the contrary, India focuses on mining coal, oil, and iron ore as long as it is a raw material for many manufacturing plants and source for a cheap energy. In such a way, proactive use of natural resources enables India to advance in the development of heavy industry.

To conclude, it is becoming increasingly apparent that the United Arab Emirates is likely to implement a meaningful green strategy in its national economy throughout the infrastructure of transport, communication, tourism, and real estate. What is more, UAE is planning a creation of its independent agricultural sector. This evidence can be regarded as an intention to address the largest extent of macroeconomics, which is quite natural regarding the tendency of UAEs globalization. As for India, its economy keeps improving towards heavy industry, which can be explained by high rates of mining national resources and increasing demand in other sectors like transport and communication, agriculture, and services. India does not intend to lead the products of heavy industry worldwide, but collaboration in terms of BRICs will lead the countrys economy to a self-sufficient level.

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