Why More Indian Expats Are Investing in UAE?

Over the past decade, a significant trend has emerged among the Indian expatriate community in the United Arab Emirates (UAE): a growing preference to save and invest their income within the UAE, particularly in dirhams, rather than remitting it back to India in Indian rupees (INR). While this shift is driven by economic factors like currency strength and better returns, it is also deeply influenced by the evolving socio-political climate in India, raising concerns over minority security and long-term financial safety.

Currency Stability and Economic Confidence

One of the foremost reasons for this trend is the strength and stability of the UAE Dirham (AED), pegged to the US dollar, providing Indian expatriates with a reliable environment for savings. The Indian Rupee, on the other hand, has seen consistent depreciation. Over the last decade, the INR has weakened significantly — from around 16.9 INR to 1 AED in 2015 to nearly 23.8 INR in 2025 — a depreciation of over 40%.

This devaluation impacts the purchasing power of expatriates sending money home and discourages keeping wealth in Indian banks where returns are often negated by inflation and a weak currency. Conversely, the UAE’s stable economy, low inflation, and tax-free income environment create an ideal scenario for wealth accumulation and long-term investments.

Fear and Uncertainty: Socio-Political Factors Back Home

Beyond economics, socio-political developments in India are influencing the decision-making of many NRIs, especially from minority communities. The rise of right-wing politics and majoritarian narratives has made several Indian Muslims and other minorities wary of investing in property or long-term ventures in India.

A Reuters report (2024) highlights how increasing Islamophobia, vigilantism, and state-sponsored demolition drives targeting minority-owned properties have generated fear and insecurity. Several state governments ruled by right-wing parties have faced criticism for bulldozer-led demolitions of Muslim properties under the guise of anti-encroachment drives — a phenomenon dubbed “bulldozer politics.”

Such incidents erode investor confidence, particularly among minorities who now perceive assets in India as vulnerable. Land ownership, once considered a secure investment, is increasingly viewed as a potential liability due to the unpredictability of political policies and communal polarization.

UAE: A Safe Haven with Attractive Investment Avenues

In contrast, the UAE offers political neutrality, social security, and robust investment opportunities. Dubai’s open-market economy, freehold property rights for foreigners, and residence-linked investment visas have turned it into a magnet for global and Indian investors alike.

Between 2020 and 2023, Indian investments in Dubai real estate alone surged to $1.6 billion. According to Khaleej Times, Indian investors purchased $335 million worth of Dubai real estate in just the first half of 2023, reflecting a 62% increase over the previous year. Indian nationals now consistently rank among the top property buyers in Dubai, second only to British investors.

Impact on UAE Real Estate and Travel Sectors

This shifting investment pattern has created ripples across the UAE’s key economic sectors, particularly real estate and tourism.

Indian buyers accounted for 12% of Dubai’s 97,398 property deals in 2022, as per Trade Arabia. The influx of Indian capital has fueled growth in residential, commercial, and luxury real estate segments, pushing prices upwards and sustaining the real estate sector’s recovery post-COVID-19. Developers are tailoring projects to suit NRI preferences, offering easy payment plans and linking investments to golden visas, making property investment not just a financial decision but a gateway to permanent residency.

Simultaneously, the growing Indian diaspora — now nearly 4 million strong in the UAE — is driving robust demand in the travel and tourism sector. According to Dubai Tourism, India was consistently the top source market for visitors, with over 2 million Indian tourists visiting in 2023 alone.

Indian festivals, cultural events, and business conferences further boost hotel occupancy, aviation, and retail sectors. Increased disposable income saved within the UAE cycles back into the economy through hospitality, education, and leisure spending.

A Tectonic Shift with Lasting Implications

What began as a pragmatic financial decision is now solidifying into a larger economic and social trend. With India’s socio-political climate raising serious concerns over asset safety and minority rights, many Indian expatriates in the UAE are choosing to invest where their wealth feels secure — both economically and politically.

This trend not only reflects a shift in sentiment but is actively fueling the UAE’s growth story, particularly in real estate and tourism. As the UAE continues to position itself as a global financial hub, the Indian diaspora’s growing preference for dirham-based investments is likely to remain a defining feature of the region’s economic landscape in the coming years.

Sources: Khaleej Times, Reuters, Arabian Business, Trade Arabia, Dubai Tourism Reports.