Depreciation of the rupee has been a dampening factor for Indian companies looking to invest in UAE's free trade zone Ras Al Khaimah, says a top official here.
"India is our most important market, we centre around top 10 cities in India... Rupee depreciation is an obstacle which Indian companies face," Peter Fort Chief Executive Officer of Ras Al Khaimah Free Trade Zone (RAK FTZ) said here.
"We hope that the Indian government improves the situation soon," he added.
Over the past few months the rupee has weakened sharply against foreign currencies, especially the US dollar. It touched lifetime low of 68.85 against the dollar on August 28.
The Indian government as well as the Reserve Bank have taken several step to arrest the rupee's decline. It has strengthened to 61.32 per dollar since it touched record lows.
RAK FTZ, which also has a presence in India since 2006, has about 30 per cent of its clients from the country.
"We hope to expand this number soon," Fort said without divulging further details.
Free Trade Zone (FTZ) provide tax and regulatory incentives to businesses to help spur investments, economic growth and exports.
As many as 7,000 companies have registered with the RAK FTZ, which was started in 2000, and about 6 per cent more companies are expected than last year.
"Cost competitiveness (is there). Our charges are lower. Cost of living in RAK (Ras Al Khaimah) is substantially lower than other Emirates," Fort said.
Spread across 2,478 sq mts RAK FTZ provides 100 per cent foreign ownership, corporate and income tax exemption and full profit and capital repatriation to the companies setting up businesses in the free trade zone.
It also offers zero export and import duties.
"Fees and license charges is the money we earn (commercial rent) is our income," he said.
More than 80 per cent of the companies who evince interest in working for the FTZ ask for commercial (business) license and about 8 per cent seek consultancy licence.
The trade zone operates as a commercial entity.
"Currently we are self funded and are also looking at debt funding in the future including banks," Fort said.
"We have to finalise our investment, have to look at our capex requirement and if we cannot do it through internal financing and then we will look at debt funding," he said, adding that it is a nascent stage.
RAK FTZ also operates Saqr port, one of the largest bulk handling ports in the region with container handling facilities.
