Dubai emerges as India's favourite destination for FDI

Apart from maintaining its top rank as the destination city for FDI from India, Dubai retained its No. 1 spot globally for attracting greenfield FDI projects in 2022.

Dubai, a favourite destination among tourists and shopping aficionados, is becoming the top choice among Indian investors. Dubai ranks No. 1 as the Destination City for foreign direct investment (FDI) from India in calendar year 2022. According to the Dubai FDI Monitor, India ranked among the Top 5 source countries for announced FDI projects and estimated FDI capital in calendar year 2022. India accounted for 12 percent of announced FDI projects in Dubai in 2022. Only the US (20 percent) and UK (13 percent) are ahead of India.

On a yearly basis, in 2021, India has 78 FDI projects in Dubai, which rose to 142 in 2022. In value terms, FDI from India stood at $545.52 million in 2022 compared to $363.85 million in 2021. With 77.5 percent greenfield projects, the top sectors for FDI projects from India to Dubai in 2022 were Software & IT Services (32 percent), Business Services (19 percent), Consumer Products (9 percent), Real Estate (6 percent), and Financial Services (5 percent). The top sectors for FDI in value terms from India to Dubai in 2022 were Consumer Products (28 percent), Software & IT Services (20 percent), Communications (19 percent), Pharmaceuticals (8 percent), and Business Services (8 percent).

Apart from maintaining its top rank as the destination city for FDI from India, Dubai retained its No. 1 spot globally for attracting greenfield FDI projects in 2022. Retaining its top spot for a second successive year, Dubai achieved 89.5 percent year-on-year (YoY) growth in total announced FDI projects in 2022, while total FDI capital surged 80.3 percent over the same period. This further consolidates the emirate’s status as one of the top three global cities, a key goal of the Dubai Economic Agenda (D33) launched by Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

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The top five source countries for FDI projects accounted for 54 percent of the total in 2022, split among the United States (20 percent), the United Kingdom (13 percent), India (12 percent), France (5 percent), and Switzerland (4 percent). Additionally, the top five source countries for FDI capital accounted for 72 percent of the total estimated flows into the emirate in 2022, split among Canada (41 percent), the UK (12 percent), the US (11 percent), India (4 percent), and Switzerland (4 percent).

The top five sectors — transportation & warehousing, hotels & tourism, renewable energy, software & IT services, and consumer products — accounted for 76 percent of the total estimated flows into Dubai and 68 percent of announced FDI projects. The transportation & warehousing sector led the pack with a dominant 45 percent share of FDI capital. Dubai FDI Monitor data also revealed that the top five business functions accounted for 78 percent of total estimated flows into Dubai, while 93 percent accounted for the total announced FDI projects in 2022. Business services also remained a prominent business function based on FDI projects and FDI capital in 2022.