Saudi Arabia eyes global halal market lead

Saudi Arabia eyes global halal market lead
The Kingdom’s importance in the halal sector was underscored during the inaugural edition of the Makkah Halal Forum held in January. (SPA)
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Updated 30 June 2024
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Saudi Arabia eyes global halal market lead

Saudi Arabia eyes global halal market lead
  • Kingdom’s regulatory framework ensures compliance with halal standards

JEDDAH: Saudi Arabia stands at the forefront of the global halal product industry, capitalizing on its unique status as the birthplace of Islam, thus earning the trust of around 2 billion Muslims worldwide.

This unparalleled position imbues Saudi halal regulations and certifications with a high degree of religious authenticity and credibility, making them highly respected and sought after worldwide. The Kingdom’s regulatory framework, spearheaded by key bodies such as the Saudi Food and Drug Authority, ensures stringent compliance with halal standards, reinforcing its leadership in the market.

The Kingdom’s importance in the sector was underscored during the inaugural edition of the Makkah Halal Forum, held in January and attended by Saudi Minister of Commerce Majid bin Abdullah Al-Qasabi. The minister pointed out that the industry is one of the most rapidly expanding sectors globally.

“Presently, the food market is valued at approximately $2.5 trillion, and is expected to reach $5.8 trillion in 2033.” the minister said at that time.

As part of its Vision 2030 initiative, Saudi Arabia is actively fostering innovation and investment in the halal sector, aiming to diversify its economy and expand its influence in the global halal market.

Through strategic collaborations, international forums like the Makkah Halal Forum, and advanced certification processes, Saudi Arabia is not only meeting the growing global demand for halal products but also shaping the future of the industry.

In a recent interview with Arab News, Yousuf Khalawi, secretary-general of the Islamic Chamber of Commerce and Development, highlighted the significant regulations overseeing the production and certification of halal products in Saudi Arabia.

He emphasized that key regulatory bodies governing the halal industry in the Kingdom include the Saudi Food and Drug Authority, the Saudi Standards, Metrology and Quality Organization, and the Saudi Accreditation Center.

“The government of Saudi Arabia regulates the halal market using the GSO 2055-1:2015 (Gulf Standardization Organization), which sets the general requirements for halal food throughout the production chain,” Khalawi said. He added that companies that deal in halal products need to be certified for compliance to Saudi standards by Saudi accredited conformity assessment bodies.

Khalawi pointed out that while many countries have other halal standards and regulations, the Islamic Chamber’s halal conferences, held around the world, are striving to pave the way for businesses to navigate such different standards and regulatory requirements.

“In the meanwhile, and through the Islamic Chamber halal services, we strive to simplify companies’ compliance with multiple standards through our unique auditing process that combines standards using artificial intelligence algorithms and ends with granting a halal certificate which can be verified using simple quick-response code readers,” he said. Commenting on Saudi Arabia’s position as the birthplace of Islam, influencing consumer perceptions and demand for halal products globally, the secretary general said that this position adds a layer of trust and potential influence in the global halal market, but it is not the only factor.

“Saudi Arabia’s status as the Islamic holy land imbues their halal regulations with a perception of greater authenticity and religious legitimacy. Some Muslim consumers might view products originating from or certified by Saudi Arabia as more trustworthy in adhering to Islamic principles,” he said.

He added: “Manafea emphasized those facts and organized the Makkah Halal Forum to be the platform where halal leaders from all over the world meet to shape the halal future.”

In 2022, the Makkah and Madinah chamber, along with the Islamic Chamber, signed the Manafea agreement, which aims to transform the two holy cities into hubs for financial and business activities in the Islamic world.

From another perspective, he said, Saudi Arabia is a major consumer and investor in the halal industry. This gives the country significant influence in shaping the global halal market and that is why the Halal Product Development Company was the strategic partner sponsoring Makkah Halal Forum.

Khalawi shed light on the strategies Saudi Arabia has employed to take its halal products to international markets, saying that the Saudi Halal Center and its collaboration with the Saudi Exports Development Authority streamline the certification process for exporters.

“This aims to make Saudi certification more attractive and user-friendly for international companies. Saudi Arabia promotes its halal standards – based on GSO 2055-1 – as a globally recognized benchmark for halal production. This leverages their position as the birthplace of Islam to enhance the credibility of their certifications,” he said. 

Saudi Arabia’s status as the Islamic holy land imbues their halal regulations with a perception of greater authenticity and religious legitimacy.

Yousuf Khalawi, Secretary-general of the Islamic Chamber of Commerce and Development

The official added that to help Saudi business reach trade partners around the globe, they are availing halal exchange, HalEx, an online platform for halal products and services exchange, operated by the Islamic Chamber’s halal services and allowing only halal products to be listed.

Moreover, Vision 2030’s focus on economic diversification presents an opportunity to attract investment in the Saudi halal industry.

Khalawi added that in the latest Makkah Halal Forum, 21 presidents of Muslim countries’ chambers of commerce attended the event to network and discuss business.

Elaborating on how Saudi Arabia is supporting the development of the halal industry within the country, he said that as part of Vision 2030, the national economic diversification plan prioritizes attracting investment in the halal sector.

“This fosters innovation and the development of new products and technologies to meet the evolving demands of the global halal market. The Saudi government is actively supporting the development of the halal industry within the country, the Halal Products Development Company plays a key role seeking partnerships with foreign companies to establish production facilities in Saudi Arabia. This strategy aims to create a robust domestic halal industry with the capacity to serve international markets,” Khalawi said.

Giving an idea about how Saudi Arabia is collaborating with other countries and organizations to promote halal standards and trade facilitation on a global scale, the Islamic Chamber’s secretary-general said that Saudi Arabia is a key player in shaping the global halal landscape through its collaborations with international organizations and bilateral agreements.

“Saudi Arabia works closely with the Organization of Islamic Cooperation to achieve harmonization of halal standards across member states and catalyst trade. Manafea is striving to bridge the gaps between countries through the Makkah Halal Forum where major players in the global halal economy meet,” he concluded.

Karim Chehade, associate partner at Bain & Co. highlighted the key factors driving the growth of the global halal product industry, emphasizing that Muslims represented around 12 percent of the world population in the beginning of the last century, but now account for nearly 25 percent.

“This number grew over the years to reach 2 billion today … with further rise expected in the future to 2.8 billion in 2050 – accounting for around 30 percent of the global population,” he said.

Chehade added that purchasing power per Muslim around the world is also on the rise, and said: “On the supply side, companies around the world have adapted their offering to meet this growing demand. 

“Food sector multinationals have widened their portfolio to include halal-certified SKUs. Other sectors such as pharmaceuticals, cosmetics, fashion have also tailored part or the entirety of their portfolio to ensure they are halal-compliant.” 

He went on to say that technology advancement and automation is another key factor, leading to higher productivity levels and increased yields, and making it financially sustainable for companies to meet halal standards, typically more stringent, while remaining competitive with main market leaders

Moreover, Chehade believes the wider assortment of halal products, driven both by new entrants and market incumbents, have improved the perceived quality, leveling it to non-halal offering and making it attractive to a non-Muslim population that is interested in the overall value proposition offered rather than the religious aspect.

“Also, governments of Muslim countries around the world are becoming more active in supporting their local champions to ensure a wider presence in local and international markets,” he said.

“Private sector companies have evolved from ensuring to meet halal certification requirements to now investing in research and development to create new halal products that meet the evolving needs and preferences of consumers,” Chehade added.

Religious institutions also play a role in shaping the halal product industry in Saudi Arabia with the Islamic Fiqh Academy, an international organization, providing guidelines and recommendations for the certification of halal products, the Bain & Co. official said, noting that many halal certification bodies follow these guidelines to ensure that their products are in compliance with Islamic laws and regulations.

Speaking about the challenger and opportunities facing the halal product industry in Saudi Arabia, both domestically and internationally, Chehade pointed out that some of the challenges include the ability for companies to scale, operational complexity, and international regulations, as well as the recent growing Islamophobia sentiment coupled with unfavorable macro-conditions could also play a role in limiting halal products consumption in selected non-Muslim countries.

As for the opportunities, the Bain & Co. associate partner highlighted growing global demand, diversification of products, and Saudi Arabia’s position as a trusted halal exporter as key opportunities.

Explaining how Saudi Arabia’s position in the halal product industry contributes to its broader economic goals and strategies, Chehade stated that the development of a strong industry in this arena serves the Vision 2030 objectives by diversifying the economy.

“The halal industry is a significant contributor to Saudi non-oil exports. The country’s position in the industry has enabled it to increase its exports of halal products to other countries, particularly in Asia and Africa,” he said.

The halal sector is also a significant employer in Saudi Arabia, providing jobs for both men and women in various areas, including manufacturing, distribution, and certification.

“Also, the halal product industry is closely linked to Islamic values, and the Saudi government has identified it as a means of fostering Islamic values of moderation and tolerance,” he concluded.


Oil Updates — crude extends climb on supply fears, trade war concerns cap gains

Oil Updates — crude extends climb on supply fears, trade war concerns cap gains
Updated 01 April 2025
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Oil Updates — crude extends climb on supply fears, trade war concerns cap gains

Oil Updates — crude extends climb on supply fears, trade war concerns cap gains

SINGAPORE: Oil prices inched higher on Tuesday after threats by US President Donald Trump to impose secondary tariffs on Russian crude and attack Iran, though worries about the impact of a trade war on global growth capped gains.

Brent futures rose 21 cents, or 0.3 percent, to $74.98 a barrel at 9:45 a.m. Saudi time, while US West Texas Intermediate crude futures climbed 22 cents, or 0.3 percent, to $71.70.

The contracts settled at five-week highs a day earlier.

“Near-term risks are skewed to the upside, with US threats of secondary tariffs on Russian and Iranian oil leading market participants to price for the risks of tighter oil supplies,” said Yeap Jun Rong, market strategist at IG.

However, broader themes still revolve around concerns of upcoming tariffs weighing on global demand, along with prospects of increased supply from OPEC+ and the US, said Yeap.

A Reuters poll of 49 economists and analysts in March projected that oil prices would remain under pressure this year from US tariffs and economic slowdowns in India and China, while OPEC+ increases supply.

Slower global growth would dent fuel demand, which might offset any reduction in supply due to Trump’s threats.

After news of Trump’s threats initially boosted prices on Monday, traders told Reuters they viewed the president’s warnings to Russia, at least, as a bluff.

Trump, on Sunday, told NBC News that he was very angry with Russian President Vladimir Putin and would impose secondary tariffs of 25 percent to 50 percent on Russian oil buyers if Moscow tries to block efforts to end the war in Ukraine.

Tariffs on buyers of oil from Russia, the world’s second largest oil exporter, would disrupt global supply and hurt Moscow’s biggest customers, China and India.

Trump also threatened Iran with similar tariffs and bombings if Tehran did not reach an agreement with the White House over its nuclear program.

“For now, it appears to be just a threat to Russia and Iran. However, if it becomes a reality, it creates plenty of upside risk to the market given the significant oil export volumes from both countries,” said ING commodities strategists on Tuesday.

The market will be watching for weekly inventory data from US industry group the American Petroleum Institute later on Tuesday, ahead of official statistics from the Energy Information Administration on Wednesday.

Five analysts surveyed by Reuters estimated on average that US crude inventories fell by about 2.1 million barrels in the week to March 28.


Saudi real estate sector playing key role in GDP growth: Minister

Saudi real estate sector playing key role in GDP growth: Minister
Updated 31 March 2025
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Saudi real estate sector playing key role in GDP growth: Minister

Saudi real estate sector playing key role in GDP growth: Minister

RIYADH: Saudi Arabia’s expanding real estate sector is contributing directly to the growth of the Kingdom’s gross domestic product, according to the minister of economy and planning.

Faisal Al-Ibrahim told Al-Arabiya Business that the Saudi government has created an enabling environment for the private sector, allowing it to focus on qualitative investment in real estate development.

Those remarks come amid a broader government effort to stabilize the real estate market in Riyadh. Over the weekend, Crown Prince Mohammed bin Salman announced a series of measures aimed at addressing rising land prices and rental costs, including lifting restrictions on land transactions and development in northern Riyadh. 

The initiative, based on studies by the Royal Commission for Riyadh City and the Council of Economic and Development Affairs, seeks to increase housing accessibility, regulate market dynamics, and ensure sustainable growth in the sector.

In his remarks, Al-Ibrahim also highlighted the importance of cost regulation in supporting the private sector, enhancing market competitiveness, and driving sustainable economic growth.

Regarding upcoming policies and regulations, he said: “All legislative measures will be announced in due course, and their impact will be monitored in a structured and institutionalized manner to ensure they achieve the desired objectives.”

According to an analysis by real estate services firm JLL released at the end of March, the Saudi real estate sector is poised for further expansion, driven by Vision 2030’s economic diversification goals.

The firm said that the Kingdom’s non-oil sector is projected to grow by 5.8 percent in 2025, up from 4.5 percent in 2024.

The report highlighted Saudi Arabia’s strong construction activity, with project awards totaling $29.5 billion in 2024. A strong real estate market is critical for the Kingdom’s ambitions to position itself as a global hub for tourism and business. 

The property market is projected to reach $101.62 billion by 2029, growing at an annual rate of 8 percent from 2024.

Despite global economic headwinds, JLL’s country head for Saudi Arabia, Saud Al-Sulaimani, emphasized that Vision 2030’s strategic diversification efforts are attracting both domestic and international capital. 

Key sectors, particularly in Riyadh and Jeddah, are seeing sustained demand, with tourism and infrastructure initiatives further stimulating investment.


Stocks slide; bonds, gold buoyed as tariffs stoke recession fears

Stocks slide; bonds, gold buoyed as tariffs stoke recession fears
Updated 31 March 2025
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Stocks slide; bonds, gold buoyed as tariffs stoke recession fears

Stocks slide; bonds, gold buoyed as tariffs stoke recession fears
  • STOXX 600 falls 1.7 percent, US futures lower
  • Nikkei dives over 4 percent
  • Trump says US tariffs to cover all countries

LONDON: Major global share markets fell sharply on Monday and gold surged to another new record after US President Donald Trump said tariffs would essentially cover all countries, stoking worries a global trade war could lead to a recession.

Trump’s comments to reporters on Air Force One seemed to dash hopes the levies would be limited to a smaller group of countries with the biggest trade imbalances.

Trump is due to receive tariff recommendations on Tuesday and announce initial levels on Wednesday, followed by auto tariffs the day after.

“What the Trump administration has shown us so far is that you should not expect a consistent approach,” said George Lagarias, chief economist at Forvis Mazars.

“This is what scares the market the most. Inconsistency breeds uncertainty, and markets hate uncertainty.”

Europe’s STOXX 600 fell 1.7 percent to its lowest level in almost eight weeks, while major indexes in Frankfurt, London and Paris fell between 1.3 percent and 2 percent.

S&P 500 futures lost over 1 percent, extending losses after Friday’s 2 percent drop, while Nasdaq futures shed 1.5 percent.

Japan’s Nikkei led the rout in Asia, losing an eye-watering 4.1 percent and falling to a six-month low as automaker stocks continued to suffer fallout from Trump’s talk of 25 percent tariffs on imported cars.
MSCI’s broadest index of Asia-Pacific shares outside Japan shed 1.9 percent.

Seeking any safe harbor from the trade storm, investors piled into sovereign bonds and the Japanese yen and pushed gold prices to another all-time high.

“For the first time in years, we find ourselves genuinely worried about risk assets,” said Ajay Rajadhyaksha, head of rates markets at Barclays.

“If policy chaos and trade wars worsen much further, a recession is now a realistic risk across major economies,” he added. “For the first time in many quarters, we favor core fixed income over global equities.”

That “R” word

Many economists are worried that tariffs will hit the US economy hard, even as they limit the Federal Reserve’s scope to cut rates by driving inflation in the short term.

Analysts at Goldman Sachs now see a 35 percent chance of a US recession, up from 20 percent previously, saying they expect Trump to announce reciprocal tariffs that average 15 percent across all US trading partners on April 2.

Data out on Friday underlined the risks as a key measure of core inflation rose by more than expected in February while consumer spending disappointed.

That raised the stakes for the March payrolls report due on Friday where any outcome below the 140,000 gain expected would only add to recession fears. Also due are a rush of surveys on factories and services, along with figures on trade and job openings.

Bond investors seemed to be betting the slowdown in US economic growth will outweigh a temporary lift in inflation and prompt the Fed to cut rates by about 80 basis points this year.

This, combined with a flight from risk assets, saw the 10-year Treasury yield drop as low as 4.184 percent while the two-year yield hit 3.842 percent. Germany’s 10-year yield fell as low as 2.659 percent, its lowest since March 5.

The outlook for rates could become clearer when Fed Chair Jerome Powell speaks on Friday, following a host of other Fed speakers this week.

The drop in US yields saw the dollar ease 0.4 percent to 149.30 yen, while the euro held at $1.08. The dollar index was steady at 104.05, having slipped for the previous two sessions.
The perceived safety of gold saw the metal hit another all-time high at $3,128.06 an ounce.


Saudi Arabia’s consumer spending to stay resilient, experts say 

Saudi Arabia’s consumer spending to stay resilient, experts say 
Updated 31 March 2025
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Saudi Arabia’s consumer spending to stay resilient, experts say 

Saudi Arabia’s consumer spending to stay resilient, experts say 
  • Millennials and Gen Z consumers will continue driving demand for e-commerce and cross-border retail
  • Government spending and economic diversification are playing a vital role in stimulating consumer spending

RIYADH: Consumer spending in Saudi Arabia is expected to stay robust this year, driven by a youthful population and digitalization, according to multiple experts. 

Speaking to Arab News, Sunil Kumar, CEO of supermarket chain Spinneys, said that consumer spending in the Kingdom is expected to witness a compound annual growth rate of 6.4 percent from 2022 to 2028, while UAE will see an expansion of 4.3 percent during the same period. 

The views of Kumar align with the findings of a recent report published by global consulting firm AlixPartners which said Saudi Arabia’s consumer market is evolving rapidly, characterized by adaptability, shifting spending patterns, and resilience in the face of global economic challenges. 

Spinneys’s CEO explained that as the Saudi and UAE economies continue to achieve growth, consumer confidence remains strong, fueling demand for premium products. 

“Convenience is another important factor, with the accelerating penetration of aggregators, as well as proprietary e-commerce platforms like our own, making fresh, premium products quickly and easily accessible,” he said. 

Spinneys opened its first Saudi store in June 2024, with 12 additional stores expected to open across the Kingdom by 2028. Spinneys

Factors driving consumer spending

Usman Iftikhar, principal in the retail and consumer goods practice for India, the Middle East, and Africa at Oliver Wyman, told Arab News that strategic government investments, digital advancements, and tourism initiatives are some of the major factors that are driving the growth of consumer spending in the Middle East and North Africa.

Iftikhar added that the MENA region now has a dynamic and evolving marketplace, fostering increased demand for a wide range of goods and services.

“The region has a young and growing population, which drives demand for goods and services, particularly in sectors such as education, technology, and entertainment. For example, in Saudi Arabia, one of the largest markets in the MENA region, more than 60 percent of the population is under the age of 30,” said Iftikhar. 

He added: “Government spending and economic diversification play a vital role in stimulating consumer spending. Many countries in the region are investing in infrastructure, tourism, and non-oil sectors, boosting employment and consumer confidence.” 

The Oliver Wyman official added that increased internet penetration and smartphone adoption are fueling e-commerce growth in the region, and is reshaping how consumers shop. 

Jim Liu, general manager of AliExpress for the GCC region, shared identical views and told Arab News that consumer spending growth in the MENA region is fueled by rapid technological advancements, evolving consumer preferences, and a digitally native, mobile-first population. 

“Structural reforms, increased investments in digital infrastructure, and the rise of payment solutions are further enhancing online retail accessibility,” said Liu. 

Speaking to Arab News in February, Ali Bailoun, regional general manager of Visa, also highlighted how consumer retail spending in the Kingdom is expected to grow significantly in the coming years, with the share of e-commerce in the overall sector projected to reach 46 percent by 2030. 

All these views align with Saudi Arabia’s ongoing transition toward a diversified, digitally-driven economy, with e-commerce playing a crucial role.

Sectors benefiting from increased consumer spending 

Experts told Arab News that several sectors including electronics and gadgets, food and beverages, entertainment and leisure, and travel and tourism, will be the beneficiaries of increased consumer spending in Saudi Arabia and the wider Middle East region. 

According to AlixPartners report, groceries and clothing categories are expected to dominate as key spending categories in 2025, with consumers prioritizing value-driven deals and savings. 

Highlighting the growth of the entertainment sector in the Kingdom, the analysis added that 33 percent of Saudi consumers plan to increase spending on entertainment outside of the home, well above the 19 percent global average. 

Usman Iftikhar, principal in the retail and consumer goods practice for India, the Middle East, and Africa at Oliver Wyman. Supplied

“Entertainment and leisure activities are seeing increased demand as disposable incomes rise. For instance, Saudi Arabia’s Vision 2030 aims to boost household spending on entertainment from 2.9 percent to 6 percent by 2030, reflecting a growing appetite for cinemas, theme parks, and recreational activities,” said Iftikhar. 

He added: “The travel and tourism sector is rebounding, with hospitality and airlines benefiting from renewed consumer interest.”

Kumar said that sustained economic growth and rising disposable incomes in Saudi Arabia and the UAE are having a very positive impact on grocery shopping.

“The fresh food segment continues to see especially strong demand, driven by a growing consumer preference for high-quality, healthy and sustainably sourced products. At Spinneys, fresh food accounted for more than 63 percent of sales in 2024, with standout performances by product categories including fresh fruit, premium berries and organic products,” added Kumar. 

Liu said that strong economic policies are elevating business confidence in the region, with consumer spending expected to increase significantly in tech gadgets. 

“At AliExpress, we see this trend reflected in high demand for tech gadgets, fashion, household electronics, and lifestyle products — categories where consumers are prioritizing quality, affordability, and convenience,” added Liu. 

The impact of inflation 

According to Oliver Wyman’s Iftikhar, inflation and global economic uncertainty are significantly affecting purchasing behavior among consumers, creating a sense of cautious optimism regarding overall spending. 

Citing a survey carried out by his firm, Iftikhar said that 31 percent of households in Saudi Arabia reported a drop in income during 2024, with 11 percent experiencing declines of more than 50 percent. 

The findings revealed that to save money, many consumers are changing their shopping behaviors, with 48 percent of those surveyed reporting comparing prices, and 46 percent actively looking for stores that offer lower prices. 

“Retailers must adapt to these shifting behaviors to meet the evolving needs of a consumer base increasingly focused on maximizing value,” he added. 

Kumar of Spinneys shared a different view and noted that the company is not seeing a slowdown in spending in response to inflation, with consumers instead preferring high-quality products, especially in the food sector. 

Liu  also shared similar views and said: “At AliExpress, we are seeing sustained growth in the region as more consumers turn to our platform for high-quality products at affordable prices — items they would typically pay more for elsewhere. This shift highlights the increasing importance of affordability, promotions, and personalized shopping experiences in maintaining customer trust and loyalty.”

Consumer spending: The future outlook

Iftikhar also outlined several key trends that will reshape the consumer spending pattern in the Middle East region over the next few years, with a particular focus on the rise of artificial intelligence. 

“AI revolution is gaining traction, with over 50 percent of customers in the GCC expressing excitement about the potential of generative AI to enhance their online and in-store experiences. Generative AI can significantly reshape the consumer experience by enabling companies to tailor products and offerings more effectively,” said Iftikhar. 

He added that personalization is becoming a key differentiator in consumer expectations, with more than 60 percent of customers interested in tailored promotions and recommendations. 

Liu said that the future of consumer spending in MENA will be shaped by digital-first retail strategies, economic diversification, and a mobile-driven shopping culture. 

“The region is undergoing a payment revolution, with digital wallets and alternative payment methods like buy now, pay later gaining significant traction. Quick commerce is emerging as a significant sector, and this growth is driven by demand for rapid delivery across non-grocery categories like beauty, pharma, electronics, and fashion,” said Liu. 

The AliExpress official added that millennials and Gen Z consumers, who expect seamless, tech-enabled shopping experiences, will continue driving demand for e-commerce and cross-border retail. 

Focusing on the future of the retail food industry in the region, Kumar said that consumer spending in the GCC will be shaped by health, sustainability and convenience. 

He added that the region is witnessing a rising demand for whole food sources, high-protein and nutrient-dense foods, as consumers become more conscious of the effects of processed eatables. 

“Convenience remains at the forefront of consumer preference, with functional beverages and nutrient-dense snacks gaining traction. However, we expect this to evolve beyond speed and ease – with consumers now seeking hyper-personalized options that deliver on health, flavor and sustainability,” said Kumar.


UAE reaches 26 trade agreements under economic partnership initiative

UAE reaches 26 trade agreements under economic partnership initiative
Updated 31 March 2025
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UAE reaches 26 trade agreements under economic partnership initiative

UAE reaches 26 trade agreements under economic partnership initiative
  • The deals come as free trade agreements across the GCC region on the rise

RIYADH: The UAE has signed five new trade deals so far in 2025, bringing the total number reached under its Comprehensive Economic Partnership Agreement program to 26.

According to the state news agency WAM, Malaysia, New Zealand, and Kenya, as well as Ukraine and the Central African Republic, all signed deals in the first quarter of the year.

These agreements sit alongside those inked with countries such as Turkiye, India, and Indonesia since the CEPA program was launched in September 2021. 

CEPA is a free trade agreement between two countries designed to reduce or eliminate barriers to trade and investment, thereby facilitating stronger commercial ties between the participating parties.

The UAE is also in the final stages of negotiations with several major economies, including Japan, and the talks are expected to be concluded by the end of this year, the statement revealed.

According to WAM, the CEPAs are having a positive impact on the UAE’s goal to raise the total value of the non-oil foreign trade in goods to 4 trillion dirhams ($1.09 trillion) and to increase non-oil exports to 800 billion dirhams by the year 2031.

“The CEPA program has accelerated this upward trajectory, supporting progress toward the targets outlined in the ‘We the UAE 2031’ vision,” said the statement. 

The news agency further said that these agreements, signed over a period of less than four years, significantly expanded the country’s global trade network while creating new opportunities for the UAE’s private sector and businesses. 

Alongside the six deals that have already come into force, 14 are undergoing technical and ratification procedures in preparation for implementation. 

The report added that negotiations on another six agreements have been finalized, and the signings are expected to happen soon. 

According to the UAE’s Ministry of Economy, the six CEPA deals that have come into force are with India, Israel, and Indonesia, as well as Turkiye, Cambodia, and Georgia. 

The ministry added that another CEPA agreement with Costa Rica will come into force on April 1. 

Following the CEPA agreement with India, which became effective in May 2022, non-oil trade between the UAE and the Asian nation grew by 20.5 percent, with the Emirates’ exports to India jumping by 75 percent by the end of 2024.

WAM added that trade with Turkiye rose by over 11 percent, with Indonesia seeing growth exceeding 15 percent, and Georgia recording a remarkable 56 percent increase since the implementation of CEPA. 

The major beneficiaries of these CEPA agreements include sectors such as logistics, clean and renewable energy, advanced technology and applications, and financial services. 

Other key sectors benefiting from these deals include green industries, advanced materials, agriculture, and sustainable food systems.

Free Trade Agreements across GCC region on the rise 

UAE’s CEPA program comes as many Gulf nations are seeking to improve non-oil trade through free trade agreements. 

In December, Saudi Arabia’s General Authority for Foreign Trade led the first round of negotiations for a deal between the Gulf Cooperation Council and Japan. 

A month earlier, New Zealand entered into a free trade agreement with the six-nation Gulf Cooperation Council, which includes Saudi Arabia, the UAE and Qatar. 

Jasem Mohamed Al-Budaiwi, secretary general of the GCC, said at that time that the agreement is expected to drive economic growth and development in both countries by facilitating trade, attracting investment, and creating new opportunities for businesses and industries.

In February, Qatar’s Emir Sheikh Tamim bin Hamad al Thani met with Indian Prime Minister Narendra Modi, and discussed various ways to enhance bilateral ties, with discussions underway for a future free trade agreement. 

Speaking at the time, Arun Kumar Chatterjee, the secretary of India’s Ministry of External Affairs, said his government is keen to implement a broader India-GCC free trade agreement, and negotiations with Qatar are a first step in this process. 

India is also on the road to finalize a comprehensive trade and investment agreement with Oman. 

In January, Omani Commerce Minister Qais bin Mohammad Al-Yousef told Press Trust of India that the pact, which is expected to be finalized this year, could significantly boost two-way trade and investment ties between both countries. 

The UK has also been negotiating with countries in the GCC since 2022 to establish a free trade agreement. 

In November, its Business and Trade Secretary Jonathan Reynolds visited Dubai as a part of the European nation’s efforts to complete the talks. 

A key economic partner for the region is China, and in September, the country’s Premier Li Qiang called for free trade negotiations between his country and the GCC nations to speed up.

He added that China is ready to further strengthen communication and coordination and consolidate the political foundation of bilateral ties, while also urging both sides to deepen cooperation in energy, investment, innovation, science and technology.