How Indian Exporters Can Cut Costs and Expand by Shifting to Dubai

At COFTT, we guide international businesses through company setup in Dubai every single day, and recently there has been a sharp rise in enquiries from Indian exporters. The reason is simple: the United States has imposed 50% tariffs on several Indian exports, making it much harder for Indian companies to remain competitive in global trade.

For many, Dubai has emerged as the most practical solution. It offers lower tariffs, better connectivity, and a friendlier business environment. What once felt like an optional expansion is now becoming a necessity. Indian manufacturer and exporters are looking at Dubai not just to avoid losses but also to position themselves for long-term growth.

In this article, I’ll explain why Dubai is attracting Indian exporters, which industries are moving first, how Free Zones can give you an edge, and the exact steps you need to set up your business here.

The Impact of US Tariffs on Indian Exporters

The 50% tariff announcement has disrupted trade routes that Indian businesses relied on for decades. Products like textiles, jewelry, pharmaceuticals, and engineering goods, all major contributors to India’s exports, are directly affected.

For exporters, this means shrinking profit margins, loss of competitiveness, and in some cases, contracts being cancelled because buyers in the US no longer find Indian goods affordable. The ripple effect goes beyond the US; once American importers pull back, global buyers start looking elsewhere too.

This pressure is driving exporters to rethink their strategy. Instead of relying only on India as a manufacturing and export base, many are shifting operations to markets that face fewer restrictions. Dubai, with its reduced duty rates and global logistics hubs, is at the top of that list.

Why Dubai is the Natural Choice for Indian Businesses

Dubai offers a combination of advantages that are hard to ignore. First, it acts as a gateway between East and West. From Dubai, exporters can reach the Middle East, Africa, Europe, and the US faster than almost anywhere else.

Second, tariffs on UAE-origin goods are significantly lower compared to India. For example, US imports from the UAE are typically subject to around 10% duty, compared to the 50% Indian exporters now face. This single factor can completely change the economics of doing business.

Third, Dubai is already home to a large Indian business community. From small traders to billion-dollar conglomerates, Indians make up a huge portion of Dubai’s commercial ecosystem. That means you will not be starting from scratch, you’ll have partners, suppliers, and even customers waiting to connect.

Benefits of Shifting Production or Operations to Dubai

For Indian exporters, moving operations to Dubai is not just about escaping tariffs. It is also about unlocking growth opportunities. Here are some key benefits:

Lower Tariffs and Costs:

Re-exporting goods from Dubai can reduce the duty burden significantly.

Global Connectivity:

With Jebel Ali Port and Dubai International Airport, goods can be shipped anywhere in the world quickly and reliably.

Tax and Ownership Benefits:

Free Zones allow 100% foreign ownership and zero personal or corporate tax in some cases.

Access to New Markets:

Dubai is not only a bridge to the US, but also to Africa, Europe, and the wider GCC region.

Many businesses also find that setting up in Dubai improves their credibility. Clients and partners often see a Dubai-based company as more international, which helps with global branding.

Industries Leading the Shift

Not every industry is equally affected by tariffs, but some sectors are moving faster than others.

Textiles and Apparel

India’s textile exports face high tariffs in the US. By shifting final production or assembly to Dubai, exporters can reduce costs and still maintain competitiveness in fashion and retail.

Jewelry and Precious Metals

Jewelry is one of India’s strongest export categories. Dubai, with its established gold and diamond markets, offers a natural extension for Indian jewelers looking to maintain global reach.

Pharmaceuticals and Healthcare

Pharmaceutical exporters are highly sensitive to regulatory changes. Dubai provides a platform to distribute not just to the US but also to Africa and the Middle East, where demand is growing rapidly.

Electronics and IT Hardware

Electronics manufacturing and assembly in Dubai allow Indian companies to avoid higher tariffs while tapping into global re-export channels.

These industries are not just moving out of necessity. They are using Dubai as a base to grow, diversify, and become less dependent on a single market.

Dubai Free Zones and Opportunities for Indian Exporters

Free Zones are the real game-changer for Indian exporters in Dubai. These dedicated areas are designed to make business easier. Some of the most attractive ones for exporters include:

Jebel Ali Free Zone (JAFZA):

Perfect for logistics, warehousing, and large-scale trade.

Dubai South:

Ideal for businesses using air freight and express logistics.

DMCC (Dubai Multi Commodities Centre):

A hub for jewelry, diamonds, gold, and commodities.

Free Zones offer benefits like simplified customs clearance, world-class facilities, and complete ownership for foreign investors. Many Indian SMEs are now setting up small offices or warehouses in these zones to reduce tariffs and expand globally.

Steps to Register a Business in Dubai

The process of setting up a business in Dubai is straightforward when guided properly. Here is a clear roadmap:

Step 1: Define Your Business Activity

Decide whether you need a trading license, a manufacturing license, or a logistics license based on your export plan.

Step 2: Choose Mainland or Free Zone

Free Zones are popular for exporters, but a mainland license may be better if you plan to sell directly in the UAE.

Step 3: Reserve Your Trade Name

Pick a business name that complies with UAE regulations and represents your brand.

Step 4: Apply for Initial Approval

Submit your application to the relevant authority (DED for mainland or Free Zone authority).

Step 5: Secure Office or Warehouse Space

Depending on your needs, you may require office space, warehouse facilities, or even light manufacturing units.

Step 6: Apply for the License

Once documentation is complete, apply for your trade license.

Step 7: Obtain External Approvals

If your products fall under special categories like food, pharma, or chemicals, additional approvals will be required.

Step 8: Collect License and Start Operations

Once approved, you can open a bank account, hire staff, and begin trading from Dubai.

Costs of Setting Up in Dubai vs Staying in India

While setting up in Dubai comes with initial costs, the savings from lower tariffs often outweigh them.

Free Zone License: Typically ranges from AED 12,000 to AED 20,000 per year, depending on the zone.

Warehouse Rentals: Flexible options depending on scale and location.

Tariff Savings: US imports from the UAE face tariffs as low as 10%, compared to 50% from India.

When exporters calculate the cost of tariffs on millions of dollars worth of goods, the business case for shifting to Dubai becomes obvious.

Government Support and Trade Incentives

The UAE and India already share strong trade ties under the Comprehensive Economic Partnership Agreement (CEPA). This agreement has lowered duties and created a smoother trade pathway between the two countries.

In addition, Free Zones and UAE authorities actively support foreign businesses with simplified regulations, fast-track approvals, and access to global logistics networks. Indian companies benefit not just from reduced tariffs, but also from being part of a trade ecosystem designed for international growth.

Long-Term Expansion Opportunities

Setting up in Dubai is not only a short-term fix for tariff problems. It positions Indian exporters for long-term growth. From Dubai, you can re-export to the US, tap into European buyers, and enter fast-growing African markets.

The stability, tax benefits, and global connectivity offered by Dubai make it a sustainable base for expansion. Many companies that initially move here because of tariffs end up staying because of the growth opportunities.

COFTT Can Help

The new US tariffs have forced Indian exporters to rethink their global strategy. At COFTT, we have seen this shift firsthand, with a growing number of Indian businesses approaching us to explore Dubai as their new base.

Dubai offers more than just a way to avoid tariffs. It provides connectivity, credibility, and long-term growth potential. If you are an Indian exporter looking to stay competitive, now is the time to act.

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Our team at COFTT can guide you through the licensing, approvals, and setup process so you can focus on what matters most, growing your business and expanding globally.