The Emirates just crossed a revenue number nobody expected – not until 2031, anyway. Most of all, The Emirates crossed it in NON-OIL TRADE.
In 2025, non-oil trade surpassed US$1.0 trillion (about AED 3.8 trillion), rising 27% from the previous year. Sheikh Mohammed bin Rashid, Prime Minister of the United Arab Emirates, announced the milestone in late January. The figure represents 95% of the non-oil trade target for the end of the decade. (Dollar equivalents are based on the UAE dirham’s fixed peg of AED 3.6725 = US$1.)
This growth was not incremental. The fourth quarter alone recorded AED 1.1 trillion in non-oil trade. Non-oil exports reached about AED 813.8 billion by year-end, growing 45.5% year on year. The export share of total trade rose to 21.6%, up from 14.1% six years earlier.
Growth Drivers Go Beyond Oil
| Export Composition | Re-exports and Imports | CEPA Trade Contribution |
| Gold and jewellery led export growth. Aluminium, refined petroleum, ethylene polymers, copper wire, precious-metal compounds, and polypropylene also expanded. Precious-metal compounds saw the highest growth, alongside plastic products and perfumes. | Re-exports totalled AED 830.2 billion, up 15.7% from 2024. Imports exceeded AED 2.1 trillion, rising 25.7%. Top imports included gold, mobile phones, automobiles, petroleum oils, jewellery, diamonds, and computers. The top ten imported categories grew 32.4%. | Trade with CEPA countries reached AED 175.5 billion, or 21.6% of total exports. By the end of 2025, 14 CEPA partners were fully operational |
India Bilateral Hits Critical Mass
| Trade Scale and Growth
India–UAE merchandise trade crossed US$100 billion in fiscal 2024–25, growing 19.6% annually. Non-oil trade reached US$38 billion in the first half of 2025, up 34%. |
CEPA Impact
The CEPA agreement entered into force on 1 May 2022. Bilateral trade nearly doubled from US$43.3 billion in fiscal 2020–21 to US$83.7 billion in 2023–24. Non-oil sectors contributed US$57.8 billion, more than half of total trade. Both governments aim for US$100 billion in non-oil trade by 2030. |
Export Structure and Signals
Engineering products make up 26.7% of Indian exports to the UAE. Electronics grew fastest, rising 32.5%. Smartphones alone generated notable export value. India issued 122,036 Certificates of Origin under CEPA last fiscal year, up from 98,104 the previous year. This shows rapid CEPA utilisation and administrative workload. |
Regulatory Architecture Tightens
- Transfer Pricing and International Tax
- Transfer pricing enforcement expanded in 2025. Country-by-Country reporting and transfer-pricing filings are now used as audit tools, not just for compliance. Multinationals with revenues above €750 million (≈ AED 3.15 billion) fall under international CbC and Pillar Two rules and must be audit-ready.
- Domestic Minimum Top-Up Tax applies to groups with effective tax rates below 15%. OECD Pillar Two rules became operational for financial years starting on or after 1 January 2025.
- E-invoicing and VAT Recovery
- The UAE e-invoicing pilot starts 1 July 2026. Technical integration requirements are extensive and exceed many companies’ preparation. Large taxpayers should plan early for testing with Accredited Service Providers.
- A five-year VAT refund window opened in January 2026. Companies can recover 2021 transactions, but audit risk also rises.
- ESG and Sustainability Regulation
- Federal Decree-Law No. 11 is now in force. It introduces legally binding sustainability obligations. Real estate developers must include sustainability in feasibility studies and permitting.
- Green building certifications are linked to rental premiums above 20% in some market segments. Non-compliance can delay approvals and create financing issues.
Structural Shifts in Trade Composition
- Non-oil Economy Structure
- Non-oil GDP is about 75.5% of the total economy. Trade contributes 16.8%, manufacturing 13.5%, financial services 13.2%, and construction 11.7%.
- Transport and storage grew 8.4% in early 2024, financial activities 7.6%, and construction 7.3%.
- Investment, Growth, and Real Estate Signals
- Foreign direct investment reached US$45.6 billion in 2024. The finance sector holds a significant share. This shows market depth but also sector concentration risk.
- Real GDP growth is forecast at 5% for 2026, above the global average of 3.4%.
- Dubai’s population exceeded 3.6 million. Around 68,000 residential units will deliver in 2026. Villa supply is tight, while apartment oversupply grows in some areas. Credit agencies warn of mid-teen price drops in certain segments despite record luxury sales.
Compliance Complexity Rises
- Corporate and Free Zone Structures
- Multiple share classes for LLCs reduce some costs but add governance complexity. Free zone amendments simplify registration but increase oversight.
- Digital and Consumer Regulation
- E-commerce fraud has risen and digital rules tightened. Single-use plastic bans vary by emirate. The SMS one-time password phase-out exposed gaps in digital infrastructure. Customer authentication readiness varies across businesses.
- Transfer Pricing and Customs Impact
- Transfer-pricing adjustments must follow interquartile ranges (25th–75th percentile) or median standards. Documentation must be contemporaneous.
- Cross-border adjustments must be defensible in both the UAE and other jurisdictions. Downward adjustments may affect customs duties already paid.
- For companies under Pillar Two, transfer-pricing changes affect effective tax rates. Year-end adjustments not reflected in accounts may impact CbC reporting thresholds and top-up tax.
Geopolitical Friction Points
| Labour Mobility and Operational Continuity
Saudi visa denials have affected UAE businesses without notice. Some routed staff through Bahrain. Tourist-visa workarounds became temporary continuity solutions. The US$22 billion cross-border trade relationship has faced stress. |
| Regional Competition Dynamics
Defence contractors and exhibitors reduced participation in some Saudi events. GCC integration assumptions are being re-tested. Companies with assets in both countries are activating contingency plans. |
Here’s what Finance Teams Should Track:
- Banking, Liquidity, and Inflation Signals
- Loan growth has outpaced deposit growth in some sectors. Private-sector credit expansion is accelerating. Loan-to-deposit ratios and liquidity buffers should be monitored closely.
- Official inflation forecasts remain moderate, but rental markets show pressure in selected locations. Off-plan buyers who paid premium prices face fewer exit options. Developers in oversupplied areas face absorption risks.
- CEPA Operational Readiness
- CEPA provides preferential access, but proper use requires maturity in origin certification, tariff classification, and documentation. Smaller firms still need to build capability.
- India confirmed it will not use the UAE as a transshipment hub for US-bound goods. Re-exports to nearby Asian and African markets are encouraged. CEPA ensures only direct exports qualify for benefits.
Forward Implications
The UAE reached 2031 targets in 2025. The key question: Will ambition rise further, or will execution complexity slow growth?
Transfer pricing scrutiny, e-invoicing, ESG enforcement, and Pillar Two all arrive in a short period. Technical ability in tax, customs, and sustainability is now a baseline requirement.
Companies treating the UAE as low-friction must adjust. Regulatory maturity is accelerating. CEPA works, but effective use requires more than basic compliance.
Geopolitical volatility is higher than many expect. Saudi–UAE competition and labour mobility constraints need planning. Multinationals should stress-test scenarios that seemed unlikely 24 months ago.
The trillion-dollar milestone validates diversification. But rapid growth brings pressure. Compliance and regulatory frameworks are tightening. Finance teams will decide if the next five years bring accelerated opportunity or operational and regulatory strain.
