What the $7B UAE-India food corridor means to businesses in the region
Food security is one of the key pillars of UAE’s vision. In November 2018, the National Strategy for Food Security was presented during the UAE Government’s second Annual Meetings. The strategy’s goals focused on “facilitating the global food trade, diversifying food import sources identifying alternative supply schemes, and covering three to five sources for each major food category.”
In line with the National Food Security Strategy 2051, the UAE has been investing in developing food security. In 2018, there were talks about the potential investments from the UAE into India in the food sector, expanding to agricultural produce as well as logistics for storage and transport.
"[UAE entities] have expressed their interest to invest up to US$5 billion in mega food parks, logistics and warehouse hubs, fruits and vegetable hubs in various Indian cities, which would create 200,000 jobs across India."Piyush Goyal, Indian Minister of Railways and Minister of Commerce and Industry
Emaar has been on the forefront of this potential investment. In a statement to WAM, they said, "Emaar Group is coordinating with the Government of India in respect of the investment relating to food security in the UAE. The investment will be made by other UAE entities, the details of which will be declared at a later stage.”
Piyush Goyal, who was recently on an official visit to the UAE, also revealed that Emaar Group is coordinating with other entities to invest up to $5 billion in mega food parks and similar facilities in various Indian cities, as well as $2 billion in contract farming, sourcing of agro commodities and related infrastructure.
The proposed mega food park projects are in various cities, such as Kutch in the western state of Gujarat, and Aurangabad that falls under the western state of Maharashtra. Projects also include another food park in Pawarkheda (Madhya Pradesh), fruits and vegetables hub in Nashik (Maharashtra), logistics and warehouse hub in Itarsi (Madhya Pradesh), and another warehousing hub in Bhiwandi (Maharashtra). The possibility of eight food parks is currently being evaluated, revealed Goyal.
India has a large agriculture industry, which is one of the primary occupation for many of its citizens living in the countryside. The sector counts for 50% of the country's employment while adding 18% to its GDP. However, the conditions for farmers have been challenging.
Moreover, India grows more food than its citizens needs, and imports much of it. Even then, 30 percent of its food goes to waste owing to lack of infrastructure. The investment from the UAE can help change this. Lesser food waste is key to food security.
In addition, the UAE can benefit from lower food prices from India while adding to its food security.
This $7 billion investment could also be highly advantageous in strengthening the logistics and trade sector in the UAE. The more sources of food that the UAE has, the better it will be able to cater to the demands of its population. The food and beverage industry also stands to benefit on multiple fronts.
As the projects are still under consideration, it is likely that this change will take some time to be set up and start providing returns. In the meantime, food startups from India, such as FreshToHome have already expanded to the UAE. The time is ripe for entrepreneurs to discover India’s potential in the food industry.