The India-Middle East-Europe Economic Corridor – All you should know about
The India-Middle East-Europe Economic Corridor – All you should know about
In a significant development during the recently concluded G20 summit held in New Delhi, India, a groundbreaking initiative was unveiled, with far-reaching implications for geopolitics and global connectivity. The United States, India, Saudi Arabia, the United Arab Emirates, along with France, Germany, Italy, and the European Union, jointly introduced the India-Middle East-Europe Corridor (IMEC). This ambitious project aims to foster economic development by enhancing connectivity and integration between Asia, the Arabian Gulf, and Europe. While it carries profound implications for global trade and politics, the IMEC also represents a dynamic shift in regional alliances and aspirations.
The IMEC at a Glance
The India-Middle East-Europe Corridor is a multimode transit corridor spanning over 3,000 miles, consisting of two primary corridors. The eastern corridor connects India to the Arabian Gulf, while the northern corridor links the Arabian Gulf to Europe. This extensive project, as outlined in the White House’s memorandum of understanding, will establish a reliable and cost-effective cross-border ship-to-rail transit network. It is designed to complement existing maritime and road transport routes, facilitating the seamless movement of goods and services between India, the UAE, Saudi Arabia, Jordan, Israel, and Europe. It is not limited to rail and shipping routes; rather, it includes an electricity cable, a hydrogen pipeline, and a high-speed data cable. This diverse range of infrastructure projects is poised to enhance trade and energy flows among the participating countries.
A Counter to China’s Belt and Road Initiative
China’s Belt and Road Initiative (BRI) has been a prominent player in global infrastructure development over the past decade. However, recent data suggests a stagnation in the value of new foreign contracted projects under the BRI since its peak in 2019, coinciding with China’s domestic real estate debt crisis. This economic challenge has raised questions about the sustainability of China’s expansive infrastructure program.
One of the most noteworthy aspects of the IMEC’s unveiling was the swift positioning of the corridor as an alternative to China’s Belt and Road Initiative (BRI). The BRI has significantly expanded China’s influence by developing trade and infrastructure networks across Asia, Europe, and Africa. However, the IMEC is not simply a rival to the BRI; it represents a different approach to regional cooperation.
Saudi Arabia and the UAE, central players in the IMEC, have shown reluctance to engage in a bipolar world order that forces them to choose between China and the United States. Their active participation in both the IMEC and their recent admission to the BRICS group of major emerging economies underscores their commitment to maintaining autonomy and safeguarding their sovereignty.
Deepening Integration and Economic Convergence
The IMEC underscores the deepening integration between India, Saudi Arabia, and the UAE, signifying broader geopolitical and economic convergence between the Middle East and South Asia into West Asia. India has become Saudi Arabia’s second-largest trading partner, with bilateral trade reaching $52.75 billion during 2022-23, elevating Saudi Arabia to India’s fourth-largest trading partner. Similarly, trade between India and the UAE surged to $85 billion in 2022, positioning the UAE as India’s third-largest trading partner for the year 2022-23 and its second-largest export destination.
This shift in regional dynamics also reflects the evolving state of Pakistan-Gulf relations, where Saudi Arabia and the UAE have adjusted their economic and geopolitical posture toward India. This shift acknowledges India’s rising influence and signifies the aspirations of Gulf nations in the emerging multipolar world. In this changing landscape, traditional alliances are being reevaluated to align with geopolitical realities and economic opportunities.
Beyond Energy: Diversification and Autonomy
The IMEC signifies that Gulf states, particularly Saudi Arabia and the UAE, are actively seeking diverse economic and technological partnerships beyond their role as energy producers. While energy remains a core pillar of their economies, the IMEC highlights that they are determined to establish more diversified and resilient economies.
For years, Washington has primarily approached Gulf states with an energy-centric perspective. However, the IMEC signals a shift towards recognizing that bilateral relations with Saudi Arabia and the UAE are multidimensional. Energy is a significant component, but it is not the sole focus. The United States aims to change the trajectory in the Gulf by involving India in both geopolitical and economic aspects.
Way forward
The India-Middle East-Europe Economic Corridor is not merely an infrastructure project; it is a geopolitical game-changer. It signifies the evolving landscape of alliances, the quest for autonomy, and the recognition that the Gulf states are integral players in the global economy. As the project unfolds, it has the potential to reshape the future of connectivity, trade, and geopolitical influence in the Middle East, Asia, and Europe. The IMEC is a declaration that global partnerships can transcend traditional boundaries and create a more interconnected and prosperous world.
Will Data-Drive The UAE’s Path to Global Prominence?
Will Data-Drive The UAE’s Path to Global Prominence?
In the current business landscape, data has become the heartbeat of decision-making, reshaping industries and economies worldwide. To thrive in this era, companies must adopt data-driven strategies that permeate their organizational fabric, from top-level executives to every corner of the hierarchy. The UAE government’s strategic initiatives, underscored by digital transformation and artificial intelligence (AI) integration, have set the stage for a data-driven future. Amidst the changing dynamics spurred by the COVID-19 pandemic, digitalization has become not just an option but a necessity for survival and success.
PioneeringData-Driven Transformation
The COVID-19 pandemic didn’t just shake up the world; it propelled industries into a fast-paced digital transformation. In a telling Dell survey, a whopping 80% of global organizations revealed they ramped up their digital efforts in 2020, all thanks to the pandemic pushing them into gear. No longer a fancy add-on, going digital turned into a must-do for businesses to survive.
But let’s not think of this as just plugging in new tech tools. It’s a big shift in how businesses work. And that’s where the UAE comes in with its bold moves. They’ve taken giant leaps towards turning data into a decision-making superstar. Think about their Digital Government Strategy, their ambitious UAE Centennial 2071 plan, and the smart UAE Strategy for Artificial Intelligence. They’re not just plans; they’re a promise to embrace data like never before. And they’ve got the rulebook sorted with regulatory authorities making sure everything’s on track.
What’s really cool is how they’ve made data part of everyday business life. They’ve thrown open the doors to data, making it work in the background, helping them make smart decisions at every level. This isn’t just about making things look good; it’s about making things work better. They’re using data to make public services sharper, to deal with risks smarter, and to keep ahead in the global competition. The UAE is proving that in this world of new ideas powered by data, following the rules and planning things out isn’t just a plus – it’s what makes digital change really stick.
AI’s Indispensable Connection to Data Sanity
The UAE’s strategic investments in AI are poised to reap substantial rewards, with the country’s AI market projected to hit $1.9 billion by 2026, sporting a CAGR of 36.2%. This growth isn’t confined to the UAE alone; the Middle East’s AI market is on track to surge from $500 million in 2020 to an impressive $8.4 billion by 2026. E-commerce, fintech, and edtech are among the sectors at the forefront of this expansion, buoyed by a solid foundation of infrastructure, robust cybersecurity measures, and a tech-savvy populace.
However, while AI offers immense potential, its effectiveness is inextricably tied to data sanity – the precision, dependability, and pertinence of data. The crux lies in the quality of data that AI algorithms learn from, as these patterns dictate AI’s performance. Real-world instances underscore the perils of compromised data quality, leading to AI mishaps encompassing flawed predictions, subpar decisions, and operational hiccups. It’s a stark reminder that in the realm of AI, data quality is the linchpin upon which success hinges.
The UAE’s commitment to data-driven strategies sets a compelling example for global players. Embracing data-driven transformation isn’t merely a choice; it’s a necessity for survival and triumph. The journey to prominence lies in the hands of those who harness the power of data, ensuring they remain at the forefront of a rapidly evolving business landscape.
India-UAE a Journey Towards De-Dollarization
India-UAE a Journey Towards De-Dollarization
In a world where the U.S. dollar has long reigned as the dominant global currency, the concept of de-dollarization is gaining traction. De-dollarization refers to the process of reducing dependence on the U.S. dollar in international trade, financial transactions, and economic interactions. As economies seek to enhance their financial sovereignty and minimize exposure to external economic fluctuations, two nations stand out as pioneers in this journey: India and the United Arab Emirates (UAE). During Prime Minister Narendra Modi’s recent visit to the UAE, the Reserve Bank of India (RBI) and the Central Bank of the UAE inked two memoranda of understanding (MoUs). These agreements not only herald a new era of trade collaboration but also mark a significant stride toward the de-dollarization of trade relations. Let’s explore how this landmark initiative is set to reshape economic dynamics and pave the way for a more diversified financial landscape.
Local Currencies: A Catalyst for De-Dollarization:
At its core, this initiative introduces a Local Currency Settlement System (LCSS) that’s redefining cross-border transactions. The Local Currency Settlement System (LCSS) simplifies trade by enabling businesses and individuals in both India and the UAE to directly engage in transactions using their own currencies. This approach minimizes external currency dependence and streamlines the trading process.
This shift offers practical advantages. It allows businesses to manage foreign exchange risks more efficiently by avoiding third-party currency conversions. With contracts and invoices in local currencies, businesses can more confidently navigate price fluctuations and engage in fair trade practices.
The move towards local currencies reflects a changing economic landscape, signaling an intention to reshape financial dynamics. While the U.S. dollar remains important, the adoption of local currencies for cross-border transactions is a practical step towards trade autonomy. This shift not only boosts bilateral trade but also encourages investment and economic growth for both countries.
In essence, the LCSS represents a pragmatic approach towards economic autonomy. It’s about facilitating smoother cross-border interactions and nurturing trade relationships using familiar currencies. While the U.S. dollar’s role persists, the LCSS introduces a more diversified and balanced trade framework between India and the UAE
Mitigating ExchangeRate Risks and Fostering Competition
At the heart of this progressive initiative lies a concerted effort to address one of the most pressing hurdles in international trade – the unpredictability of exchange rate fluctuations. Conventionally, trade transactions have been orchestrated using third currencies as benchmarks, inadvertently exposing businesses to the uncertainty of currency valuation. This practice has often complicated pricing strategies and introduced an element of instability into trade dynamics.
By advocating for the adoption of local currencies in export contracts and invoices, this initiative introduces a transformative shift. It is a shift that not only redefines how trade is conducted but also offers a practical solution to the intricate web of exchange rate risks. The move to denominate contracts in local currencies provides a much-needed safeguard against the capricious nature of currency markets. This, in turn, creates an environment that is not only conducive to fostering competitive pricing but also empowers businesses with a newfound level of financial security.
This transition is far more than a mere economic maneuver. It’s a deliberate step towards asserting financial sovereignty – a demonstration of a nation’s ability to insulate its trade from external fluctuations. It signifies a collective determination to minimize vulnerability to the whims of global currency markets. As industries and businesses increasingly embrace this approach, the broader narrative unfolds as one of self-reliance, resilience, and an unwavering commitment to navigating the intricate complexities of global trade on one’s own terms.
Elevating Economic Ties
The partnership between India and the UAE has transcended borders and expectations, giving rise to an exceptional trade synergy that surpassed even the most optimistic projections. As we delve into the realms of economic ties, it’s evident that the India-UAE trade collaboration has not merely flourished; it has evolved into a resounding success story. The trade volume between these two nations, standing at an impressive $85 billion in 2022, serves as a testament to the strength and depth of this association.
Beyond the sheer numerical significance, this collaboration bears profound implications for both economies. The metamorphosis of the UAE into India’s second-largest trading partner underscores the pivotal role it plays in the Indian trade narrative. Simultaneously, India’s ascent to becoming the UAE’s third-largest trading partner and second-largest export destination reflects the reciprocal nature of this partnership, where mutual growth and benefits have been seamlessly intertwined.
Delving deeper, the robust foundation of this economic alliance is fortified by India’s influential position as the UAE’s fourth-largest investor. This underscores a shared vision of cultivating economic diversity and resilience. As India invests in the UAE, it not only signifies a financial commitment but also echoes a vote of confidence in the UAE’s potential as a strategic economic partner.
The confluence of trade, investment, and collaboration serves as a beacon illuminating a path towards a multifaceted economic ecosystem. The transformation of trade figures into tangible opportunities for businesses, entrepreneurs, and industries resonates with the core essence of this partnership. It’s a synergy that transcends numbers, encapsulating the shared aspirations of both nations to propel their economies to new horizons.
In essence, the India-UAE economic alliance is not merely about transactions; it embodies the essence of cooperation, growth, and progress. It stands as a living testament to the belief that partnerships built on trust, shared values, and complementary strengths can transcend expectations, elevate bilateral relations, and reshape the future economic landscape.
Seamless Transactions and Reduced Reliance on the Dollar
The second Memorandum of Understanding (MoU) stands as a testament to this endeavor, marking a pivotal stride in the de-dollarization effort. By ingeniously linking India’s Unified Payments Interface (UPI) with the UAE’s Instant Payment Platform (IPP), this initiative unfolds a realm of possibilities. It’s a strategic move that defies the traditional norms of global financial transactions and charts a new course driven by innovation and collaboration.
A cornerstone of this integration is the coupling of card switches—RuPay switch and UAESWITCH—a convergence that shatters barriers and paves the way for cross-border fund transfers of unparalleled efficiency. This union of payment systems heralds a new era of fast, secure, and cost-effective transactions, a realm where geographic boundaries hold no sway over the movement of funds. As two powerful systems unite, they create an intricate yet seamless web of financial connectivity, enabling individuals and businesses to navigate the intricate world of cross-border payments with unparalleled ease.
While this innovation bears far-reaching significance, its impact is particularly pronounced for the 3.5 million resident Indians in the UAE. Remittance costs, which have long weighed heavily on the minds of expatriates, are now poised to undergo a transformation. The alliance of UPI and IPP presents a viable solution, addressing a pressing concern by ushering in an era of reduced transaction costs. This move is more than a mere convenience; it’s a tangible relief for the millions who diligently contribute to their home country’s economy while supporting their families from afar.
In essence, the integration of UPI and IPP is more than a technical accomplishment; it’s a testament to the commitment of both nations to facilitate smoother financial interactions and bridge the gap between geographic distances and financial complexities. As these systems converge and resonate, they paint a portrait of a future where economic interactions are not bound by the constraints of the past but propelled by the possibilities of innovation. It’s a journey that encapsulates the essence of partnership, as two nations come together to rewrite the script of international financial transactions and set new standards of efficiency, inclusivity, and progress.
As India and the UAE embark on this transformative journey of trade diversification and reduced dollar reliance, they illuminate the path for others to follow. The de-dollarization momentum they’ve set in motion resonates far beyond their borders. This initiative signifies more than just financial innovation; it’s a declaration of economic resilience, strategic collaboration, and the pursuit of a future where financial sovereignty takes center stage. Through the India-UAE MOU, the stage is set for an epochal shift in trade dynamics, echoing a call for more balanced and diversified financial interactions on the global stage.
Transforming UAE’s Supply Chains for Sustainability and Transparency!
Transforming UAE’s Supply Chains for Sustainability and Transparency!
The UAE, like many other geographies, faces challenges in ensuring traceability and accountability in supply chains. Complex global networks, limited visibility, and reliance on manual processes hinder accurate data capture and verification. Recently though, the focus on sustainable practices and transparency in supply chains has gained significant momentum. Consumers and businesses in the UAE are increasingly conscious and concerned of the origin and environmental impact of products. To address these concerns and foster a greener economy, the UAE is increasingly focusing on blockchain as a technology to revolutionize traceability and accountability in its supply chains. Blockchain has the potential to play a pivotal role in driving sustainability and enhancing trust in the UAE’s supply chain ecosystem.
The energy sector stands is a prime example of an industry where blockchain can exert significant influence. With the potential for energy plants to cause irreparable harm, this highly regulated sector operates under intricate global and regional procedures, all while striving for sustainability. Global blockchain in energy market is projected to reach $1,564M by 2026 with a CAGR of 37.6%, as per Fortune Business Insights. The growing adoption of blockchain technology in the energy sector addresses regulatory compliance, sustainability, and process efficiency. This market growth signifies the transformative potential of blockchain in revolutionizing the energy industry for a sustainable future. By integrating blockchain technology, the energy sector effectively addresses these challenges, accelerating industry processes while ensuring compliance and environmental responsibility.
These changes are not just visible and confined to an industry. The UAE has witnessed remarkable implementations of blockchain-enabled traceability. For example, the Dubai Blockchain Food Safety Project leverages blockchain to enhance food safety by ensuring end-to-end traceability of food products. Similarly, the Emirates Authority for Standardization and Metrology (ESMA) collaborates with blockchain companies to authenticate halal products, fostering transparency and meeting Islamic dietary requirements.
Benefits of Blockchain-Enabled Traceability
The application of blockchain in supply chain management offers numerous advantages, including increased transparency, improved efficiency, enhanced traceability, and strengthened customer relationships. It also contributes to a better brand image and higher return on investment for businesses.
- Real-time tracking: Blockchain enables transparency and decentralization, allowing real-time tracking of activities in the supply chain, leading to increased transparency in industries like manufacturing and fashion.
- Faster processing: By replacing intermediaries and eliminating paper-based processes with smart contracts, blockchain reduces operational time and improves efficiency, especially in lower supply tiers and the shipping industry.
- Strengthening traceability: Blockchain technology enhances traceability in the supply chain, addressing demands and regulations for provenance information. It mitigates quality-related issues, such as reputational damage, recalls, and revenue loss due to counterfeit or unauthorized products.
- Healthy customer relationships: Blockchain empowers consumers to access detailed product information and track orders transparently, fostering trust and improving customer experience.
- Higher ROI: Blockchain helps businesses build a strong brand image in the decentralized market, leading to increased return on investment.
- Effective tradeability: Blockchain facilitates efficient licensing and ownership by utilizing smart contracts and maintaining consensus, ensuring accurate tracking of ownership records.
Overcoming Challenges and Adoption Considerations
While blockchain offers immense potential, challenges such as scalability and interoperability need to be addressed for widespread adoption in the UAE. Collaborative efforts among industry stakeholders, government support, and the development of regulatory frameworks are pivotal in overcoming these obstacles. The UAE Government issued Cabinet Resolution No.111 of 2022, which became effective on January 14, 2023. This resolution aims to regulate virtual asset-related activities by providing guidelines for entities engaged in such activities. The purpose is to ensure that these entities obtain the necessary licensing and approvals from Financial Regulators or their delegates. The UAE government has been pushing the envelope on blockchain and digital assests from last decade. The Emirates Blockchain Strategy was introduced by the UAE government in April 2018. Its objective is to leverage blockchain technology in order to migrate 50% of government transactions onto the blockchain platform by 2021. The strategy encompasses various initiatives that target improved efficiency, cost reduction, and enhanced customer experience.
Future Outlook
The future of sustainable supply chains in the UAE is intertwined with blockchain technology. As the UAE continues to prioritize environmental sustainability, blockchain’s integration with emerging technologies like the Internet of Things (IoT) and artificial intelligence (AI) will further enhance supply chain transparency and efficiency. For technologies to cross hands data will have to play a crucial role since AI relies heavily on data, hence data sanity will be of utmost importance. Moglix has been working with organisations in the UAE to sort their data challenges and transform their procurement value chain at a rapid yet sustainable pace
Embracing blockchain enables the UAE to solidify its position as a global leader in sustainable practices and reinforces its commitment to a greener future. The UAE’s commitment to revolutionizing supply chain traceability and accountability through blockchain technology demonstrates its dedication to sustainability and transparency. By leveraging blockchain, the UAE is building a robust and trustworthy supply chain ecosystem that aligns with consumer expectations, protects the environment, and drives the nation’s sustainable development goals.
Identifying and Eliminating Waste in Warehouse Operations
Identifying and Eliminating Waste in Warehouse Operations
Efficiency and cost savings are critical goals for any warehouse operation. To achieve these objectives, it is essential to identify and eliminate waste within warehouse processes. According to a study by the Warehousing Education and Research Council (WERC), transportation waste accounts for an average of 30% of total logistics costs in warehousing operations. Waste can manifest in various forms, hindering productivity, increasing costs, and impacting customer satisfaction. In this blog post, we will explore different types of waste commonly found in warehouse operations, discuss their impact, and share relevant statistics to emphasize the importance of waste elimination. By understanding and addressing these waste types, businesses can enhance operational efficiency, reduce costs, and optimize their warehouse operations. The Institute of Industrial Engineers (IIE) states that reducing waste in warehouse operations can lead to cost savings of up to 20% and productivity improvements of 10-30%.
Types of Waste in Warehouse Operations:
Transport Waste
Transportation waste refers to inefficiencies in the movement of goods within the warehouse. An example of this could include unnecessary material handling, inefficient routing, and excessive travel distances. These waste factors can result in increased fuel consumption, higher transportation costs, and delays in order fulfillment.
To eliminate transportation waste, warehouse managers can implement strategies such as optimizing delivery routes, consolidating shipments, and utilizing software solutions for route planning and tracking. By doing so, businesses can reduce fuel consumption, transportation costs, and improve overall delivery efficiency.
Inventory Waste
Inventory waste arises from poor inventory management practices. Overstocking, underutilization of available space, and the presence of obsolete inventory can tie up capital, lead to storage inefficiencies, and increase the risk of product expiration or obsolescence.
To address inventory waste, warehouse managers can focus on implementing just-in-time inventory management techniques, conducting regular inventory audits, and utilizing data-driven forecasting models. These strategies help optimize inventory levels, reduce carrying costs, and improve space utilization within the warehouse.
Motion Waste
Motion waste encompasses unnecessary or excessive movements within the warehouse. N example of this can include inefficient picking routes, disorganized storage layouts, and excessive searching for items. Motion waste contributes to increased labor costs, reduced productivity, and longer lead times. The Lean Enterprise Institute found that motion waste can contribute to up to 50% of total labor time in some warehouses, indicating significant room for improvement.
To eliminate motion waste, warehouse managers can optimize the layout of the warehouse, streamline picking paths, and implement efficient storage systems. Leveraging technology solutions like barcode scanning and automated guided vehicles (AGVs) can further enhance efficiency by minimizing unnecessary motion and improving overall productivity.
Waiting Waste
Waiting waste occurs when there are delays or bottlenecks in warehouse processes. It can be caused by factors such as lack of coordination between departments, machine breakdowns, or inadequate staffing. Waiting waste leads to idle time, decreased throughput, and customer dissatisfaction due to delayed order fulfillment.
To address waiting waste, warehouse managers should focus on improving communication and coordination between teams, ensuring machinery is well-maintained and properly serviced, and
optimizing staffing levels based on demand. By minimizing waiting times, warehouses can enhance overall productivity and improve customer satisfaction.
Overprocessing Waste
Overprocessing waste arises from unnecessary or excessive steps in warehouse operations. This can include redundant paperwork, double-checking processes, or additional inspections beyond what is required. Overprocessing waste adds complexity to operations, increases costs, and hampers overall efficiency.
To eliminate overprocessing waste, warehouse managers should review and streamline existing processes, automate repetitive tasks where possible, and ensure that quality checks are performed at appropriate stages. By eliminating unnecessary steps and optimizing processes, warehouses can reduce costs, improve operational efficiency, and accelerate order fulfillment.
Defects and Rework Waste
Defects and rework waste result from errors or substandard quality in warehouse operations. This includes damaged goods, incorrect labeling, picking errors, or inadequate packaging. Defects and rework waste lead to customer dissatisfaction, increased costs, and loss of productivity. The National Association of Manufacturers (NAM) reported that defects and rework waste can account for up to 20% of overall production costs in warehouses
To address defects and rework waste, warehouse managers should focus on implementing quality control measures, providing adequate training to warehouse staff, and utilizing technology solutions such as automated picking systems or quality assurance software. By improving accuracy and minimizing errors, warehouses can reduce rework, enhance customer satisfaction, and increase operational efficiency.
Every warehouse is unique, and identifying specific areas of waste requires a thorough analysis of your own operations. Tailor the waste elimination strategies to suit your warehouse’s specific needs and continually strive for continuous improvement to maximize efficiency and achieve long-term success. To successfully eliminate waste, warehouse managers should adopt a systematic approach that includes analyzing current processes, identifying areas of waste, implementing appropriate strategies, leveraging technology solutions, and continuously monitoring and improving operations. By embracing lean principles and utilizing data-driven insights, businesses can create leaner and more efficient warehouse operations, resulting in cost savings, improved customer experiences, and a competitive edge in the market. Moglix’s evolving warehouse network in UAE is providing reliable inventory management solutions to its customers. With strategically located warehouses in the UAE, Moglix ensures quick and efficient delivery, reducing lead time and optimizing supply chain management. Know More
Challenges faced by e-commerce
Challenges faced by e-commerce
E-commerce is growing at an unprecedented pace in the UAE, as more consumers are turning to online shopping due to its convenience, speed, and safety during the COVID-19 pandemic. According to a recent report by Dubai Economy, the e-commerce market in the UAE grew by 47 per cent in 2020, with online sales reaching AED 24.8 billion ($6.8 billion). Furthermore, the same report predicts that the UAE’s e-commerce market reached AED 100 billion ($27 billion) by 2022, representing a remarkable growth opportunity for businesses operating in the supply chain and procurement sectors. However, with the rapid expansion of e-commerce comes a number of challenges that businesses must overcome to capitalise on this growth trend.
Meeting customer expectations
The rise of e-commerce has changed customer expectations, with many consumers now expecting faster delivery times and more flexible shipping options. For businesses in the UAE’s supply chain and procurement industries, this means adapting to new delivery models and investing in technologies like real-time tracking and automated warehousing.
Managing Inventory
In the UAE, successful inventory management is essential for e-commerce companies. Businesses must make sure they have adequate inventory on hand to meet demand without overstocking, given the rapid growth of internet sales. Understanding procurement holistically and choosing partners who can provide Procurement as a Service is one way firms can better predict customer demand and adjust their inventory levels. Moglix is one such partner that E commerce firms can depend on as it integrates software-as-a-service with on-ground supply chain operations. Its e-catalog based buying model allows an e-commerce like buying experience. Its evolving warehouse network in the UAE allows it to manage inventory and eventual last mile delivery with precision, allowing firms to optimize their inventory cost.
Fulfillment and Shipping
Fulfillment and shipping are key components of the e-commerce supply chain, but they can also be complex and time-consuming. To optimise these processes, businesses in the UAE should consider partnering with reliable shipping and logistics providers, as well as investing in technologies like automated order processing and real-time tracking. A recent survey conducted by PwC Middle East found that 75% of UAE consumers expect their online purchases to be delivered within three days, while 28% expect delivery within 24 hours.
Managing Returns
Returns are an inevitable part of e-commerce, but they can also be costly and time-consuming to manage. To address this challenge, businesses in the UAE should invest in an efficient returns management system that can help them quickly process and resell returned items. According to a survey by Dubai Economy and Visa, 31% of UAE consumers cited the ability to return items as an important factor in their online shopping experience.
Staying Compliant
The UAE has strict regulations around e-commerce, including rules around online payments, consumer data privacy, and product labelling. To ensure they stay compliant, businesses in the UAE’s supply chain and procurement industries should work closely with legal and regulatory experts, as well as invest in technologies like secure payment gateways and data encryption.
Although there are difficulties, e-commerce is revolutionizing the supply chain and procurement sectors in the UAE. Businesses in the UAE need to be proactive in solving these issues if they want to flourish in the e-commerce landscape, from managing returns to meeting client expectations. Businesses can optimise their e-commerce supply chains and procurement processes and remain ahead of the curve.
UAE’s Journey to Net-Zero Emissions through Sustainability
UAE’s Journey to Net-Zero Emissions through Sustainability
As the UAE continues to experience significant growth and progress, it has also realized the impact of its actions on the environment. With the highest per capita carbon footprint globally, the country has acknowledged the need to prioritize sustainability for the well-being of its citizens and the planet. The UAE has set impressive targets to achieve net-zero emissions by 2050 and reduce greenhouse gas emissions by 23.5% by 2030, demonstrating a deep commitment to the cause.
UAE has already declared 2023 to be the ‘Year of Sustainability’, with a focus on implementing sustainability practices like raising the capacity for renewable energy, enhancing energy efficiency, and lowering waste across multiple industries. It has taken important steps to reduce its carbon footprint and promote sustainability.
One of the most notable initiatives is Masdar City in Abu Dhabi, which has set the goal of being carbon-neutral and zero-waste. This incredible urban development utilizes clean, renewable energy sources like solar and wind power and promotes sustainable transportation options such as electric vehicles and public transit.
It is heavily investing in renewable energy projects, such as the Mohammed bin Rashid Al Maktoum Solar Park, which is one of the largest solar energy projects globally. The country’s target of generating 50% of its electricity from renewable sources by 2050 is ambitious but achievable with the UAE’s continued commitment.
The Dubai Metro, a sustainable transportation option that operates on renewable energy, is yet another example of the UAE’s dedication to sustainability. The government has also implemented several other initiatives to encourage renewable energy, sustainable transportation, and eco-friendly infrastructure, furthering the country’s commitment to a more sustainable future.
The UAE, being a major hub of trade, is taking significant steps towards reducing its carbon footprints in the supply chain industry. To achieve this, they are adopting green logistics practices such as providing efficient routing and scheduling, utilizing green transportation systems, promoting sustainable packaging, and implementing green practices in warehouses. Furthermore, it is also prioritizing supply chain sustainability by managing resources sustainably, reducing the use of hazardous materials, promoting sustainable production methods, and ensuring responsible and ethical sourcing of materials and products. By adopting these measures, the UAE is promoting a more sustainable approach to the production and distribution of goods, while also reducing their environmental impact.
According to the World Economic Forum,” Energy, materials, and mobility, which are the top 3 carbon-emitting industries, can reduce emissions by 4-10% by 2030 with an increased focus on the adoption of digital technologies.” Moglix supports the UAE’s vision to become a carbon-neutral economy by 2050. We have been enabling organizations to digitally transform the procurement supply chain process at a rapid yet sustainable pace.
Contact us to know how we can empower your transformation journey!
Indian MSMEs Fueling Dubai’s Economic Diversification
Indian MSMEs Fueling Dubai’s Economic Diversification
Dubai’s reputation as the “Gateway to the Middle East” has long been established, drawing businesses from around the globe seeking to tap into the region’s lucrative markets. Among these, Indian MSMEs have gravitated towards Dubai’s business-friendly ecosystem, strategic location, and supportive regulatory environment. As of 2022, over 83,000 Indian companies have registered in Dubai, signaling its growing appeal to Indian entrepreneurs.
Rising Employment Opportunities in Dubai: A Boon for the Workforce
The expansion of Indian MSMEs in Dubai has created new jobs in various sectors, such as manufacturing, retail, and hospitality. Indian firms and NRI-owned entities have created over 1 million jobs in the UAE, providing local employment opportunities. These businesses have been hiring local talent and providing employment opportunities for Dubai’s growing population. This has helped to boost the Emirate’s economy by reducing unemployment rates and increasing consumer spending. Indian MSMEs’ success in Dubai may inspire more Indian businesses to look into doing business in the UAE and other Gulf nations. For Indian SMEs, this may result in more export options, enabling them to grow their clientele and their earnings. Additionally, Indian businesses may be able to use the UAE’s strategic location as a point of entry to other Middle Eastern and African markets.
Beyond Oil and Gas: A Tale of Economic Diversification
Dubai has traditionally relied on its oil and gas industry as a primary source of revenue. However, the emirate has been working towards diversifying its economy and reducing its dependence on these resources. The expansion of Indian MSMEs has helped to achieve this goal by introducing new industries and business sectors in the emirate. This has helped to make the economy more resilient and less vulnerable to fluctuations in global oil prices.
The Power of Collaboration: Boosting Business Growth
Indian MSMEs expanding their global presence in Dubai also foster business collaborations with local companies. This has helped to create new business opportunities, increase trade relations, and improve the competitiveness of Dubai’s businesses in international markets. Collaboration between Indian MSMEs and local companies has also led to knowledge sharing, transfer of expertise, and development of new products and services.
Knowledge is Power: The Benefits of a Knowledge-Driven Economy.
The expansion of Indian MSMEs in Dubai also contributes to developing a knowledge-based economy in Dubai. For example, the new India-UAE Start-Up Corridor targets 50 tech start-ups from India and UAE, aiming to foster 10 into unicorns by 2025.
Indian businesses are known for their expertise in the IT, healthcare, and education sectors. Their presence in Dubai contributes to developing new knowledge-intensive industries like research and development, consulting, and data analytics.
Bridges to the Future: Infrastructure Development for a Better Tomorrow.
To attract and retain businesses, Dubai needs to have world-class infrastructure in place. The expansion of Indian MSMEs has spured investment in infrastructure development, such as transport, logistics, and telecommunications. This improves connectivity and makes Dubai an even more attractive location for businesses.
Indian MSMEs and Dubai: A Partnership for Mutual Growth and Success
Dubai has emerged as a significant player in diverse sectors such as tourism, logistics, finance, and technology, thanks to favorable government policies and initiatives to attract foreign investment, promote entrepreneurship, and foster innovation. As the emirate continues to evolve as a global business hub, the partnership between Indian MSMEs and Dubai is poised to be a vital one, driving mutual growth and success.
We at Moglix have been working with MSMEs in the UAE and India to enable them a greater market to play in and explore new opportunities.Know more.
Abu Dhabi Gives Small Businesses a Procurement Power-Up!
Abu Dhabi Gives Small Businesses a Procurement Power-Up!
Small and medium enterprises form a significant part of the UAE’s business landscape, and they are critical to the Emirates’ ambition to become the world’s top nation for entrepreneurship.
The UAE is home to about 350,000 SMEs, representing over 94% of all active companies in the country. These enterprises employ 86% of the private sector labour force and contribute over 60% of the total GDP(1). In Abu Dhabi alone, SMEs account for more than 90% of businesses, employ 39% of the workforce and contribute 32% of non-oil GDP
Abu Dhabi SME Champion Programme – Game-Changer
The Abu Dhabi Department of Economic Development (ADDED) recently unveiled the Abu Dhabi SME Champion programme, an initiative to empower SMEs in the region. The programme seeks to assist SMEs in securing procurement opportunities from major private and public sector firms, thus supporting their growth and expanding their capabilities.
Four of Abu Dhabi’s leading companies – Etihad Aviation Group, Aldar Properties, Emirates Steel Arkan Group, and Ittihad Papermill – have already committed to procurement opportunities worth AED 30 million in the programme’s first phase. These companies will also nominate specialized teams to coordinate and work with selected SMEs on training and workshops, equipping them with the necessary skills to compete professionally in procurement.
The Abu Dhabi SME Champion programme is designed to ensure that SMEs in the region are equipped with the necessary skills and resources to compete effectively in procurement and scale up their businesses. The programme’s future cohorts will see the participation of more large companies and government-related entities, indicating a growing trend of support for SMEs in Abu Dhabi.
The programme underscores the government’s commitment to promoting economic growth and championing SMEs as drivers of a vibrant, private sector-driven economy. According to His Excellency Sameh Al Qubaisi, Director General of Economic Affairs at ADDED, Abu Dhabi is focused on developing a knowledge-based, innovation-driven economy, with SMEs and start-ups playing a pivotal role in this vision.
Building a Unicorn Nation
In October 2022, the Ministry of Economy launched the second phase of The Entrepreneurial Nation, an initiative designed to catalyse the growth of 8,000 SMEs based in the UAE, foster foreign direct investment, and establish the UAE as home to 20 unicorns by 2030(3).
The initiative has already generated impressive results, with over 40 successful public-private partnerships and programs established, attracting more than 800 SMEs and over 5,000 individuals to participate. Since its inception, The Entrepreneurial Nation has created significant value, with AED 19.5 million delivered to date.
UAE’s SMEs Set to Take on the World
The UAE’s pro-SME policies and programs are geared towards cultivating a culture of innovation and entrepreneurship, enabling SMEs to play a critical role in the UAE’s economic development. Through these initiatives, the UAE is positioning itself as a leader in the global entrepreneurial landscape.
As a leading procurement solutions provider, Moglix recognises the significance of procurement opportunities for SMEs in the UAE and committed to delivering value at scale. Contact us today to learn more about how we can support your business and help you take advantage of the opportunities provided by the UAE.
UAE’s New Corporate Tax: What You Need To Do To Prepare
UAE’s New Corporate Tax: What You Need To Do To Prepare
The UAE has long been known for its business-friendly policies and tax-free environment. However, the UAE has been looking to diversify its revenue streams with the global economic landscape constantly evolving. In January 2023, the UAE announced the introduction of a new federal corporate tax law to promote economic growth and broaden its revenue base.
This new tax law marks a significant departure from the previous tax-free environment, as it imposes a 9% corporate tax rate on companies operating in the UAE, with some exemptions and deductions available. UAE businesses must stay informed about the new corporate tax regulations to ensure compliance and avoid potential penal consequences.
The Taxman Cometh: What UAE’s Corporate Tax Means for Taxable Entities
The new corporate tax will come into effect on 1 June 2023 and apply to financial years commencing on or after that date. The corporate tax rate is set at 9% and will only apply to taxable income exceeding AED 375,000. Any income below this threshold will not be subject to tax.
Under the new law, resident companies will be taxed on their worldwide income, meaning any income derived from inside and outside the UAE. To be considered a tax resident of the UAE, a legal entity must meet specific criteria, including being established under UAE law, being effectively managed and controlled in the UAE even if established under foreign law or being determined as a tax resident by the tax authorities.
Meanwhile, non-resident companies will be subject to corporate tax under specific circumstances, such as having a permanent establishment in the UAE, deriving UAE-sourced income, or having a nexus in the UAE as determined by the tax authorities.
Free zone entities will also be subject to tax on non-qualifying income. The tax authorities will define qualifying income in due course.
Tax Breaks for the Lucky Few: Who’s Exempt from Corporate Tax in the UAE?
Certain entities will be exempt from the corporate tax. These exempt entities include government entities and government-controlled entities, as well as those engaged in extractive or non-extractive natural resource businesses. The exemption will ensure the growth of the UAE’s financial services and the oil and gas sector.
Qualifying public benefit entities, investment funds, and public or private pension or social security funds that meet certain conditions are also eligible for exemption.
Keeping Records: Your Key to Tax Compliance
Taxable entities will be required to maintain accurate records and documents for 7 years after the end of the relevant tax year. These records will be essential to back up the information provided in tax returns or any other documents filed with the tax authorities and will help the tax authorities determine the taxable income.
But it’s not just taxable persons who need to keep records. Even if you’re exempt from tax, you still need to maintain records that will allow the tax authorities to verify your exempt status. These records should also be kept for 7 years after the end of the relevant tax year.
Tick Tock Taxpayers: Deadlines for Tax Returns and Payments
Taxpayers must file a tax return within 9 months from the end of the tax year. They must also make corporate tax payments within 9 months from the end of the tax year. The good news is that taxpayers are not required to make advance corporate tax payments.
Although registration for e-filing of tax returns under the new federal corporate tax regime is yet to be notified by the FTA, the tax returns can be electronically filed on the EmaraTax portal of the tax administration once it is announced.
From Compliance to Optimization: Enhance Your UAE Business Operations
As UAE sets its sights on diversifying its economy, the recent announcement of a federal corporate tax law signals a new chapter for businesses operating there. Moglix supports businesses in the UAE, offering solutions to streamline procurement processes. Contact us to learn more.
Back