A Global Study Report On “Effective analysis of trade opportunity in UAE-Indian perspective” Submitted to: Gujarat Technological University IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF AWARD FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION Under the guidance of: Dr. Viral Bhatt Principal Sal Institute Of Management, Ahmedabad. Submitted By: Students Of Marketing and HR SEM:4 MBA: 2012-2013 Sal Institute Of Management Certificate This is to certify that this comprehensive project report title, “Effective analysis of trade opportunity in UAE-Indian perspective” is the bonafide work of Students of Marketing and Hr, SEM: IV, MBA: 2012- 2013, Sal Institute Of Management who carried out the research under my supervision. I also certify further, that to the best of my knowledge the work reported herein does not form part of any other project report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any other candidate. Project Guide: Dr. Viral Bhatt Principal, Sal Institute Of Management, Ahmedabad. Sign: _________________ Declaration We, students of Marketing HR, SEM: IV, MBA: 2012-2013, Sal Institute Of Management, hereby declare that the Global Study Project entitled “ Effective analysis of trade opportunity in UAE –Indian perspective ” is a result of our own work and our indebtedness to other work publications, references, if any, have been duly acknowledged. Date: 20/4/2013 Place: Ahmedabad Preface “Experience is the best teacher” This saying has played a guiding role in including GSR as a part of the curriculum of the MBA programme of the Gujarat Technological University. This study report allows students to do practical work and to study real global business environment which develops a feeling about the difficulties and challenges in the business world. In this direction we have tried our best to present a project report. This project report will help the readers to know in depth about “ Effective analysis of trade opportunity in UAE-Indian perspective ” The preparation of this project is based on facts and findings noted and information collected from various secondary sources such as internet, Books, News Papers, Magazines and written and published documents. In spite of our best efforts, there may be omission and commissions which may please be excused….! Acknowledgements We are extremely thankful to Prof. Jigar Nagvadia and Dr. Ritika Jain for his valuable guidance and helpline that was provided to us throughout completion of this project. He was always there to lend a helping hand & directed us towards proper attitude to develop the project work. Without his help and right guidance the completion of project would have been very difficult. The level of knowledge he posses has covered entire aspects of the management expertise in different fields, particularly in market research and marketing management. We are also really indebted to those all people who heartily helped us throughout completion of this project. We are also thankful to our institute Sal Institute Of Management and GTU for offering us such a great subject that bind all the knowledge we have gained throughout our study and last but not the least we would like to thanks all our friends who have provided their thoughts and help directly and indirectly about our project during development and for the further enhancement. With Thanks……. Students of Marketing & HR SEM: IV MBA: 2012-2013 Sal Institute Of Management. Table Of Contents Sr no. Particulars Page no. 1. Resent speech of P. Chidambram about fiscal deficit 1 2. Growth story of India 5 3. India is exporting country 15 4. Introduction to UAE 24 5. Food grain sector 48 6. Textile sector 62 7. Tourism sector 77 8. Gems & Jewellery 108 9. Engineering goods 124 10. Leather sector 151 Conclusion 169 Bibliography 171 EXECUTIVE SUMMARY As the speech given by our Finance Minister P.Chidambram that there is having current deficit in our country, so that to make the balance of payment India has to try to export the goods to various country to make the balance of payment. So India is planning to collaborate with other developed countries and India is the major exporter to the Asia and Specifically to the UAE. The Gulf region has historical, political, economic, strategic and cultural significance for India. India has traditional and friendly relation with all GCC member states. With a bilateral trade estimated at USD 145 billion during 2011-12, GCC is now our largest trading partner in the world. As we had explored the some sector which are seeking the opportunity to enhance the GDP growth rate as well as to reduce the current deficit of India. As some areas which had covered are Food Industry, Tourism Industry, Engineering Industry, Textile Industry, Gems and Jewellery and Leather Industry. As India is land of Food and Agriculture, so there is having huge opportunities for India to export the goods to UAE. As the UAE does have only 1% fertile land, so they do not have any opportunity to grow vegetables and other food products to the UAE. In UAE 80% of the citizens are from other countries so they do not like locally processed goods. As India should export the Pour Non-Basmati rice as they ban the Non- basmati rice because it spoiled with in 10 days. India should export the dairy products in the large quantity as the demand of the product is increasing. As the demand of the tea is increasing in the UAE and as India sis the 2nd largest producer of the tea, so India is having the huge opportunity to export the various type of tea to the UAE in bulk quantity. The UAE economy is proving to be extremely resilient in a difficult global economic climate and opportunities to do business in the country are many. The UAE’s currency, the dirham, which is pegged to the US dollar, is secure and freely convertible; there are no restrictions on profit transfer or capital repatriation; import duties are low (less than 5 per cent for virtually all goods) and, in the case of items imported for use in the free zones, non-existent; labour costs are competitive; corporate tax and personal taxes are nil and numerous double taxation agreements and bilateral investment treaties are in place. In addition, the financial risk is minimal. These factors, combined with a strategic, accessible location for major regional markets, an excellent reliable infrastructure and an extremely pleasant, stable and safe working environment are key elements in attracting foreign investment. An expected growth rate is projected till 2014. Real GDP is expected to grow at a healthy rate and growth pick up pace in 2012 and beyond. By the year 2016, the tourism sector is expected to earn US$ -US$ billion. Tourism industry has contributed significantly to the GDP. By the year 2016, the tourism sector is expected to earn US$~ billion. As India is the major exporter of engineering goods in the UAE. As the growth of the UAE is increasing simultaneously the use of the engineering goods is increasing. So India had to export as possible as to export the engineering goods to the UAE. Export of engineering items to GCC region during the period 2010-2011 stood at US$ 8194.53 million compared with US$ 4014.08 million during the same period of the previous year, registering an overall growth of 104.14 per cent. As India is one of the famous lands for the textile products due to easy availability of the raw material and other related products to manufacture the textile products. As the atmosphere of the UAE is very hot and surrounding area are very arid in nature so due to that consumption of the cotton products are demanding in nature. As India is considered cotton product hubs so there is great opportunities’ for the country to earn huge amount of foreign exchange from the UAE country. As UAE is considered one of the fashionable countries and enjoy all festivals & occasions at the most so there are great chances for the consumption of finished products of Gems and Jewel. India is having rich source of the finished gems & jewels products, so it seek a great opportunities in the country and earn foreign currency which will enhance the financial position of India. 1 INTRODUCTION Latest Conference of Chidambaram on Reduce fiscal deficit and current account deficit on 16th April, 2013. “Reduce Fiscal Deficit.” “Finance Minister P Chidambaram has made it clear that any bilateral investment protection agreement has to be subject to jurisdiction of domestic.” • Overturning fears of foreign investors about fiscal deficit, Finance Minister P Chidambaram has said that India was committed to reducing its fiscal deficit and would achieve the target of 3% in 2016-17. Chidambaram said the final reading of last year's fiscal deficit would come to below 5.3% • He said: "India will reduce the fiscal deficit until we reach the target of 3% in 2016-17 or perhaps a little earlier." • Chidambaram said the final reading of last year's fiscal deficit would come to below 5.3%."When the actual numbers are out in the next couple of months, I'm confident it will probably be 5.1%," he said. • He pointed to the stimulus measures taken by the government, after the 2008 global economic crisis had driven fiscal deficit and inflation "out of control". • "It appears that while the first stimulus package was necessary, the second stimulus package was doubtful and the third stimulus package was perhaps avoidable," • Chidambaram said at a breakfast meeting organized by the Canada-India Business Council here yesterday. 2 • The Minister said that India was on the path of fiscal consolidation."I said in the year 2012-13 I will bring fiscal deficit down to below 5.3%, and going forward, I will reduce the fiscal deficit every year by 0.6% until we have achieved the target of 3% in 2016-17.