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Inside look: UAE-Israel trade & investment potential

Emerging air, sea and land corridors between the UAE and Israel could unlock significant investment opportunities

On the morning of August 16, 2020, for the first time ever in decades, you could pick up the phone in the UAE and dial +972 — the country code for Israel, now unlocked. A little after that, at the end of the month, the first-ever direct commercial flight took off from Tel Aviv to touch down in Abu Dhabi. On board, high-level Israeli and US delegates with then American president’s son-in-law Jared Kushner at the helm.

But tourists came soon after: in the months since, over 130,000 Israeli tourists have landed in the UAE — and counting. Now, major carriers whizz back and forth between the two countries several times a week. Emirates has even set up its own state-of-the-art kosher food production facility to cater to the region’s aviation and hospitality sectors. And plans for visa-free travel between the two nations are in the works, likely to materialise well in time for the upcoming Expo, which will feature its own dedicated Israeli pavilion.

The Abraham Accords that normalised ties between Israel and the UAE have done this and more. Since the signing, Israeli companies have committed to investing upwards of USD 500 million in major sectors across the UAE. Israeli property buyers are picking up real estate across the emirates. And bilateral trade is booming: trade between Israel and Dubai alone has topped USD 270 million in the first five months of normalisation.


All this in a few months. The growing web of added direct shipping lines, new ports and docks, direct air traffic, and more recently, the possibility of a new ‘peace corridor’, a direct land route, lurking in the seams — if you take these catalysts into account, say Israeli authorities, non-defence trade between the nations could reach anywhere between USD 4 billion and USD 6.5 billion over the next three to five years, which works out to more than 1.5 per cent of each country’s GDP.

Of course, this is in the wake of pandemic-induced constraints on regional and global demand — and still, the volume of imports and exports traversing the seas between the two countries impresses, already amounting to over 6,200 tonnes. Fruits and vegetables, diamonds and flat screens, mechanical and medical devices make up some of the most popular imports coming in from Israel. The UAE’s exports to Israel include perfumes, engine spare parts, smart phones, and again, diamonds.

Growing trade will also create jobs: more than 15,000, according to DP World. The logistics giant has already signed a series of cooperation agreements on cargo, port and free-zone development to better facilitate trade between the nations.


To maximise potential, to boost trade and investment flow, officials are now negotiating a free-trade agreement and a double taxation treaty, details to which are promised in the next two to three months. And in the meanwhile, the UAE has announced a USD 10 billion fund to invest in strategic Israeli sectors such as energy, manufacturing, water, space, healthcare and agri-tech.

This, in addition to the USD 3 billion joint investment fund set up by the UAE, the US and Israel immediately after the accord was signed. Several other investment deals have also been signed at the corporate level, particularly with banks in both countries. Reciprocal agreements have also taken place between stock markets and diamond centres.

And now, Israel has expressed an interest in leveraging Jebel Ali Port as a re-export hub for Israeli products to fast-growing markets such as India, Pakistan, Bangladesh and Sri Lanka — the four countries boast a combined population of more than two billion. According to top diplomats, trilateral trade between Israel, the UAE and India alone could clear USD 110 billion by 2030 with the UAE serving as a gateway.


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