Happy Wednesday everyone!

Indian exporters are rerouting operations to the UAE, using free zones and final-stage assembly to reclassify goods and dodge new Trump-imposed tariffs on India. In tech and investment news, Saudi billionaire Prince AlWaleed bin Talal has boosted his stake in Snap Inc., signaling confidence despite the company’s ad-driven revenue struggles. Meanwhile, Israel’s military costs are climbing sharply, with the offensive on Gaza City expected to add $7.5 billion to its already record war bill.

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Markets

Indians Are Shifting Production To UAE To Circumvent Trump Tariffs, Using Free Zones And Final-Stage Assembly

🔹 What Is It About

Indian exporters are increasingly moving final-stage manufacturing, assembly and packaging to UAE free zones to qualify goods as Emirati and sidestep steep US duties introduced under President Trump, reported AGBI. Firms bring semi-finished items to Jebel Ali, Sharjah and other hubs for “last-mile” value addition so shipments meet rules-of-origin thresholds and face much lower US duties — a rapid, pragmatic response to the new tariff regime.

🔹 Why It Matters

The August tariff hike added 25% duties on many Indian imports — doubling effective levies to about 50% in some categories — pushing companies to seek alternatives. By adding up to 40% local value in the UAE, exporters can reclassify origin and avoid the higher India tariff, preserving US market access. The shift threatens to reroute supply chains, alter regional trade flows and blunt the economic impact that tariffs aim to impose on New Delhi.

🔹 What’s Next

Expect faster free-zone onboarding, with textiles, jewellery, pharma and electronics leading moves and Jebel Ali’s Bharat Mart (opening Q1 2027) accelerating the trend. Authorities report thousands of expressions of interest and rising investor enquiries, and firms are scaling UAE operations to meet origin rules. Policymakers in the US, India and UAE may respond with tighter origin checks or new trade measures as these circumvention strategies reshape bilateral trade patterns.

Alwaleed Boosts Stake In Snap After Weak Sales Hit Shares

🔹 What Is It About

Saudi billionaire Prince Alwaleed bin Talal Al Saud has acquired 15.2 million shares in Snap Inc., raising his total stake to 40.8 million shares, or 2.8% of the company. The latest purchase, valued at $133.5 million, comes after Snap reported weaker-than-expected second-quarter sales, sending its stock lower. Alwaleed confirmed the move but didn’t comment on the timing, price, or motivation behind the investment.

🔹 Why It Matters

Snap’s shares are down nearly 90% from their 2021 peak, pressured by rising competition from TikTok, Instagram, and YouTube. The company hasn’t turned an annual profit since its 2017 IPO, and recent ad glitches added to concerns over revenue growth. With TikTok’s US future stabilizing under a Trump-backed deal, Snap faces intensifying competition for advertising dollars and user engagement in the youth-driven short-form video space.

🔹 What’s Next

Alwaleed, ranked 156th on the Bloomberg Billionaires Index with a $16.5 billion fortune, remains one of Snap’s most prominent backers. His increased stake signals confidence in the platform’s long-term value, despite its struggles. For Snap, the challenge will be leveraging its strong North American user base and private messaging appeal to defend market share and reignite investor confidence amid intensifying rivalry.

Israel’s Gaza City Offensive To Push War Costs Higher By $7.5 Billion

🔹 What Is It About

Israel’s planned assault on Gaza City is set to increase its war costs by 25 billion shekels ($7.5 billion) through year-end, an official told Bloomberg. This comes on top of a 204-billion-shekel tally for the nearly two-year conflict that has spread to Lebanon, Iran, Syria, and Yemen. Spending has been driven by reservist salaries, ammunition, and missile interceptors, with the cabinet now seeking a 30-billion-shekel budget increase.

🔹 Why It Matters

The war bill already exceeds 1% of Israel’s GDP, straining a $580 billion economy still below pre-war levels after inflation. Heavy reliance on borrowing and record bond issuance has widened the deficit outlook to 5.2%. With the Gaza City push and regional escalation, international pressure is intensifying, as countries including France, Canada, and the UK move to recognize Palestinian statehood, deepening Israel’s diplomatic isolation.

🔹 What’s Next

Israel plans long-term procurement worth $49 billion to strengthen its defense, including fighter jets, missile boats, and R&D. Officials warn intercepting threats costs millions but prevents far greater damage. With Netanyahu’s government committed to defeating Hamas and preparing for possible clashes with Iran and Yemen, military spending is set to remain elevated, suggesting further budget revisions and prolonged economic strain ahead.

👨‍💻From Smashi Business’ Desk

• Dreamers: Shakour Abu Ghazalah, once left with nothing after a bank collapse, turned resilience into Albaik—the Middle East’s fast-food giant.

• Dubai Entrepreneur Saif Kidwai: “Avoiding Tough Calls Is Killing Middle East Company Culture”.

• Apple Unveils Latest iPhone at Dubai Mall, Starting from AED 3,399

🔍In other news…

• Dubai listing poised to value Alec Holdings at nearly $2 billion

• Abu Dhabi's Presight and Shorooq launch $100m AI fund

• World Bank establishes regional hub in Riyadh 

• Slow UAE internet? Red Sea cable cuts are not the only reason why

• Saudi Arabia to soon deploy autonomous aerial vehicles in new deal

🏦 Crypto Corner

• Crypto data reveals UAE has mined bitcoins worth $700m

• Michael Saylor — Executive Chairman of MicroStrategy and one of Bitcoin’s most vocal corporate advocates — will make his first-ever appearance in the UAE at Bitcoin MENA in Abu Dhabi.

• Hut 8, part of a American BTC which is partially owned by Donald Trump Jr. and Eric Trump, Gets Approval to Operate in Dubai Financial Hub.

• Abu Dhabi Judicial Department now accept AE Coin.

We are launching a Smashi Crypto newsletter in September 2025! Subscribe to it here to get the weekly updates from the world of digital assets.

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