Various Emirati stakeholders have signed a preliminary agreement for the “Bonded Rail Corridor” project across the country. The railway would link the Fujairah terminals in the east with Khalifa Port on the west coast. The UAE are likely setting up for future Indian manufacturing flows to Europe.
Signatories to the agreement include Etihad Rail, Abu Dhabi Customs, Fujairah Customs, Abu Dhabi Ports Group, Fujairah Terminals, and Noatum Logistics. They want to work together to streamline transportation on the route by reducing customs clearance times and facilitating entry and exit through coordinated pre-inquiry procedures.
Etihad Rail will get priority clearance with customs systems, giving the operator a competitive advantage on the line. The corridor will be implemented across free zones, transit shipments, exports, and the domestic movement of goods between the Emirates of Abu Dhabi and Fujairah, says Etihad Rail.
Pilot operations are supposed to start in Q4 2025, and there are plans to extend the initiative to more locations. The UAE is hoping that the streamlined corridor will improve the country’s position as a global trade and logistics hub.
Indian manufacturing
Rail freight consultant Xavier Wanderpepen points to changing freight flows as underpinning the Emirati effort. Countries across the broader Gulf region have decided to invest in infrastructure, because they could benefit from low-cost manufacturing moving out of China.
“Their thinking is that China is gradually reducing its role in low-cost manufacturing, moving away from shoes, clothes, and toys, and shifting toward higher-value industries such as electric vehicles and advanced technology”, Wanderpepen explains. “The production of low-cost consumer goods is already shifting to Vietnam and Cambodia, and is expected to expand significantly in India over the next decade”, he adds.
Within that context, countries in the Middle East could position themselves as a central hub along the India – Middle East – Europe Corridor (IMEC). “Over the next 10–20 years, they aim to become a logistics hub for India, which is expected to emerge as the ‘new workshop of the world’”, says Wanderpepen. “The Emirates in particular want to establish multiple platforms and solutions to capture that role.”