Indian firms shift to UAE as US tariffs hit

The Indian businesses UAE shift has accelerated after U.S. tariffs on Indian exports officially doubled to 50%. Many companies no longer see these measures as temporary. Instead, they are actively exploring production hubs and joint ventures in the UAE to safeguard access to the U.S. market.

Tariffs trigger urgent moves

Initially, Indian exporters believed the first 25% tariff increase announced by President Trump could be a negotiating tactic. But after a second 25% hike on goods from countries buying Russian oil, the situation became more serious. Food processing companies, jewellery manufacturers, and other exporters have begun holding talks with UAE partners about relocating production.

Jewellery exporters face the greatest challenges. With tariffs at 50%, the landed price of Indian jewellery could remove them from the U.S. market. By shifting production to the UAE, tariffs would fall to 10%—but only if significant value is added locally.

Growing UAE appeal

Consultants confirm rising enquiries from Indian businesses since the tariff announcements. According to Sovereign Group’s Oksana Sukhar, Indian firms made up around 5% of all business setup enquiries in the UAE since January 2025. She explained that exporters targeting the U.S. are reconsidering where to base production to secure more favourable tariffs.

The UAE already hosts Indian firms in textiles, garments, metals, chemicals, pharmaceuticals, and IT-enabled services. These established players enjoy early-mover advantage, making it easier to expand operations quickly and meet new demand.

Rules of origin and supply chain recalibration

To qualify for lower tariffs, Indian firms must meet rules of origin requiring 35–40% local value addition in the UAE. This means they cannot simply re-export goods; a meaningful share of manufacturing, assembly, or finishing must happen locally.

Venkatesh Santhanam of MCA Gulf noted that many companies are recalibrating supply chains by moving final-stage production, establishing packaging and distribution centres, and forming joint ventures. These steps ensure compliance with U.S. trade rules while building stronger bases in the UAE.

Strategic advantage

The Indian businesses UAE shift shows a wider global trend: firms are diversifying production to hedge against geopolitical risks. By using the UAE’s trade-friendly environment and global connectivity, Indian exporters hope to cushion tariff shocks while positioning themselves for long-term growth.