MAYS IBRAHIM (ABU DHABI)
The UAE is hardening its industrial backbone for a more volatile world, pairing state-backed funding with tighter localisation rules to make domestic manufacturing a cornerstone of economic growth.
On Monday, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, approved a sweeping package aimed at strengthening the country’s industrial sector.
This includes a Dh1 billion National Industrial Resilience Fund, designed to anchor supply chains locally and reduce exposure to global disruptions.
The fund arrives at a time when geopolitical tensions and shifting trade dynamics have exposed vulnerabilities in international supply lines — a reality that industry experts say is reshaping how countries think about production. They see the initiative as a shift from efficiency-driven globalisation to resilience-focused localisation.
“The long-term value of this initiative is not only in the capital being made available, but in how it can support more resilient local supply chains, deeper domestic manufacturing capability, and greater confidence among investors and industrial operators,” Hande Bilgisu, Head of Risk Consulting at Marsh IMEA, told Aletihad.
By prioritising sectors such as food security, pharmaceuticals and advanced manufacturing, the fund could reduce reliance on external sources for essential inputs and finished goods, she added.
“It also creates an opportunity for more vertical investment, where companies look beyond immediate production capacity and consider the resilience of the wider value chain, from sourcing and logistics to continuity planning and risk transfer,” Bilgisu noted.
She also pointed out that companies will need to rethink their operating models to fully benefit. That includes improving visibility over suppliers, developing contingency plans, and embedding risk management into expansion strategies, rather than treating disruption as an afterthought.
The shift in mindset is echoed by legal and business experts, who say the push for localisation is as much about long-term economic strategy as it is about immediate risk mitigation.
“Given the global volatility in supply lines … it becomes important that local production and manufacturing of goods and commodities are scaled up,” Ashish Mehta, founder and managing partner of Ashish Mehta and Associates, told Aletihad.
Beyond crisis-proofing supply, he pointed to a broader economic rationale: diversifying away from traditional sectors such as energy and real estate, while leveraging trade agreements to export UAE-made goods into major markets.
From Incentive to Mandate
In a significant policy shift, the Cabinet also made the National In-Country Value (ICV) programme mandatory across federal entities and companies with at least 25% government ownership.
Previously an incentive-based scheme, the move effectively guarantees demand for locally manufactured goods by directing public procurement toward domestic suppliers.
The goal is to localise more than 5,000 critical products, from industrial components to essential goods.
“The expansion of this programme across federal entities and national companies creates predictable procurement demand for local suppliers, making private investment more bankable,” UAE-based researcher Ehtesham Shahid told Aletihad.
Direct Impact
For manufacturers, the implications are immediate: the government becomes a reliable, large-scale buyer, the experts said.
“[This means] any private company manufacturing locally has a guaranteed customer in UAE government and state-owned entities,” Mehta explained. “This is perhaps the greatest assurance that any businessperson could ask for.”
The strategy is particularly impactful in capital-intensive sectors such as pharmaceuticals and advanced metals, where upfront risks have historically deterred private investment, according to Mehta.
The resilience fund is structured to lower those barriers through a mix of financial incentives, guaranteed demand, and support for the integration of advanced technologies such as artificial intelligence.
Shahid said small and medium-sized enterprises (SMEs) that align their product lines with national priorities, such as medical supplies, food processing inputs, and industrial components, stand to benefit the most.
With access to advanced technology, SMEs could expand production without proportionally increasing labour costs, added Mehta.
Boosting Local Products’ Visibility
Complementing the financial and regulatory measures, the Cabinet also approved the creation of a National Industrial Data Committee to streamline access to industrial data and improve integration across systems.
A new policy was also introduced to boost the visibility of UAE-made products across retail and e-commerce platforms, starting with essential goods.
“The package positions the UAE less as a low-cost manufacturing base and more as a high-reliability industrial hub,” Shahid said.
These measures come as the UAE gears up for the 5th Make it in the Emirates platform, to be held from May 4 to 7 at ADNEC Centre Abu Dhabi.
The event serves as the UAE’s flagship industrial exhibition and a national platform designed to promote local manufacturing, attract investment into priority sectors, and showcase industrial capabilities.