Economic Diverisifcation in U.A.E: A Step of Sustainability and Its Impact on India's Trade Since 1991

Abstract

Economic diversification, in the context of resource-rich nations, focuses on the long-term, sustainable growth of the non-resource sector, which has the potential to bring in a sizable amount of money for the nation. This paper examines the economic diversification as the step of sustainability for United Arab Emirates and its impact on India’s trade with UAE since 1991. It pinpoints the patterns of both imports, exports, bilateral trade, oil and non-oil exports & import from this nation with abundant hydrocarbon resources. Oil product basically means ITCHS 27 product which include Mineral fuels, oils, distillation products, etc. To determine the impact, classical linear regression model (CLRM) is applied using OLS method. The empirical study illustrates the impact of proxies of economic diversification on India’s exports, import and trade with UAE and is based on export statistics and export composition as a trade diversity measure. Economic diversification is divided as domestic diversification and trade diversification. To measure the impact of domestic and trade diversification on India's import, export, bilateral trade with the UAE, various proxies are utilised.