UAE Sets Up $272M Fund to Boost Local Industry and Secure Supply Chains
By integrating AI-based predictive systems into production and procurement, policymakers aim to anticipate disruptions rather than merely respond to them.
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[Image source: ChetanJha/MITSMR Middle East]
Mohammed bin Rashid Al Maktoum, Prime Minister of the UAE has approved a suite of measures to secure the supply chains while accelerating domestic manufacturing capacity. Announced following a Cabinet meeting, the decisions center on a newly created National Industrial Resilience Fund, capitalized at AED 1 billion ($272 million), alongside regulatory shifts that make local sourcing a requirement rather than an incentive.
The fund reflects a growing recognition among advanced and emerging economies alike: resilience is no longer a byproduct of efficiency but a strategic objective in itself. Tasked with supporting the localization of critical industries, the fund will channel investments into sectors ranging from food production and pharmaceuticals to advanced manufacturing and chemical industries. Officials said it will also help with the creation of strategic reserves and strengthen industrial value chains, particularly in areas vulnerable to external shocks.
Primarily, the initiative embeds AI into industrial planning. The UAE government intends to deploy AI tools for demand forecasting and risk modeling — an acknowledgment that supply chain fragility is increasingly a data problem as much as a logistical one. By integrating predictive systems into production and procurement, policymakers aim to anticipate disruptions rather than merely respond to them.
Complementing the fund is a structural overhaul of the National In-Country Value (ICV) Programme. Previously designed as an incentive mechanism, the programme will now be mandatory across federal entities and companies with significant government ownership. The shift effectively converts public spending into an industrial policy lever, directing procurement toward domestically produced goods. In doing so, the government is attempting to reshape market behavior at scale to anchor local manufacturing ecosystems.
A parallel policy targeting retail and digital marketplaces highlights this demand-side strategy. The Cabinet has approved measures to increase the visibility and shelf presence of UAE-made products, beginning with essential goods such as dairy, poultry, bread, and cooking oils. By mandating dedicated space for locally produced items, the government is intervening not just in production but in consumption patterns — an approach more commonly associated with import-substitution regimes than with the UAE’s traditionally open trade model.
Taken together, these policies suggest an emerging hybrid framework: one that retains the outward-facing orientation of the UAE economy while selectively insulating critical sectors. The emphasis on “more than 5,000” products slated for localisation points to a granular mapping of supply vulnerabilities, likely informed by pandemic-era disruptions and ongoing geopolitical instability.
The timing aligns with the upcoming Make it in the Emirates 2026 forum, scheduled to take place in Abu Dhabi. Initiatives such as a Start-ups Hub and a national “House of Industry” museum further indicate an effort to merge industrial expansion with narrative-building around economic identity.
To support these ambitions, the Cabinet also approved the creation of a National Industrial Data Committee, which will standardize and integrate industrial data across government systems. The committee will be chaired by Hasan Jassim Al Nowais, Undersecretary of the Ministry of Industry and Advanced Technology.
As global supply chains become more politicized and less predictable, the UAE is recalibrating — leveraging state capacity, data infrastructure, and targeted market interventions to build a more self-reliant industrial base without fully retreating from globalization.
