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How the UAE is redefining global water trade by turning scarcity into strategy
With more than 40% of its potable water derived from desalination, the UAE is one of the world’s most advanced users of non-traditional water sources
- PUBLISHED: Mon 4 Aug 2025, 1:54 PM
Faced with extreme scarcity, the UAE is turning constraint into opportunity, using its logistics muscle, regulatory agility and investment firepower to become a regional hub for aquatech, desalinated exports and water technology innovation, according to a study released by the Dubai MultiCommodities Centre (DMCC).
“While the direct international trade of physical water remains relatively limited, its broader significance in global commerce is growing. Physical water trade typically occurs via pipelines, tankers or bottled water. The UAE, for instance, imported over 94 million litres of bottled water in 2023 – mainly from Switzerland, Saudi Arabia and Turkey – while positioning itself as a regional re-export hub through its logistics network,” the free zone said in its latest report – The Future of Trade.
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With more than 40 per cent of its potable water derived from desalination, the UAE is one of the world’s most advanced users of non-traditional water sources. Over Dh7.3 billion (nearly $2 billion) has been allocated to the development of new desalination facilities.
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Michael Rutman, co-CEO of Baynunah Watergeneration, said the UAE is well-positioned to shape the future of water trade and technology. “With its geostrategic location, logistics capabilities and forward-looking leadership, the country is rapidly becoming a nucleus for aquatech innovation and export. We see the United Arab Emirates as a very big launch pad for disruptive innovations,” he said in the report.
“We see it as a gate to the world.”
It is estimated that two-thirds of the region’s water originates from outside its borders.
“The UAE is focused on diversifying import sources and building robust logistics systems to ensure supply security. Imports of high water-footprint products – ranging from wheat to bottled water – enable the country to conserve desalinated freshwater for sustaining critical, high-value industries, ranging from AI and logistics to green energy and food manufacturing,” said DMCC.
As water stress intensifies, countries are increasingly relying on virtual water trade – importing water-intensive goods such as crops, semiconductors and bottled water – to safeguard domestic supplies. By 2100, it is estimated that virtual water flows are projected to increase fivefold, transforming trade strategies and exposing new geopolitical dependencies, said The Future of Trade report published by DMCC.
Shortage of funds
Globally, water markets remain poorly governed and underfunded.
Most investment still comes from public sources, and few countries assign water a meaningful price. Without better regulation and financial innovation, from tradable rights to tokenisation, water will remain a neglected threat in global trade and development strategies.
The World Bank estimated that up to $7 trillion (Dh25.7 trillion) must be mobilised by 2030 to meet the Sustainable Development Goal of clean water and sanitation for all. Yet current annual investments fall short by hundreds of billions, with more than 90 per cent of funding coming from public sources, it said.
“Private capital remains hesitant, discouraged by long payback periods, regulatory complexity, and modest financial returns. Bridging this financing gap will require a shift in how water is valued and governed. One promising approach is the financial reclassification of water as a tradeable asset, unlocking capital flows and incentivising more responsible use,” DMCC said.
