India-UAE Set to boost ties and Strengthen Strategic Partnership

UAE’s Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan is scheduled to visit India on 21st November 2022 on a bilateral visit. In an earlier bilateral engagement this year, he and External Affairs Minister Dr S Jaishankar co-chaired the 14th India-UAE Joint Commission on 01st September in UAE. The visit comes close on heals of India taking over the G20 presidency from Indonesia on 15th November and India’s invitation to UAE (among small group of select countries) to be special guests at G20 Summit in India next year. UAE too is scheduled to host the COP28 Summit next year, the pivotal platform on climate issues where India has a critical voice. Both India and UAE also form part of ‘I2U2’ or the ‘West Asian Quad’ comprising of India, Israel, US and UAE, clearly indicating the importance of India and UAE in the region.

India and UAE share a special relationship, built on a strong civilizational ties, culture, trade, energy security and people to people interactions. This bond has further grown stronger after Sheikh Mohammed bin Zayed Al Nahyan or MBZ was declared as the de-facto ruler and Narendra Modi got elected as India’s PM, both developments, coincidently taking place in 2014. Over the years, both the leaders have developed a deep and common understanding of important issues in the region and the pivotal role that the two countries can play to enhance peace and prosperity in the region.

The tone to this special relationship was set when PM Modi visited the UAE in August 2015, first visit by Indian PM after a gap of over 34 years. During this visit, the two countries agreed to elevate the bilateral relationship to a higher plane by signing a comprehensive strategic partnership. MBZ, the Crown Prince of UAE visited India twice in quick succession, in February, 2016 and thereafter in January, 2017 as Chief Guest at the Republic Day celebrations, signaling the importance the UAE attached to its growing relations with India. PM Modi returned to the UAE in February 2018 for the World Government Summit where India was given the privilege as the ‘Guest of Honour’. In April 2019, the UAE President further cemented this relationship when he honored PM Modi with the award of the ‘Order of Zayed’, the highest decoration awarded to select heads of foreign governments. This year too, the momentum of engagement has picked up after Covid-19 andboth leaders signed the landmark India-UAE Comprehensive Economic Partnership Agreement (CEPA) during a virtual summit on 18th February. Later, PM Narendra Modi also paid a brief visit to Abu Dhabi on 28thJune and met the UAE President.

As regards trade, UAE is India’s third largest trade partner with a bilateral trade of US $ 72.8 billion in FY 2021-22. UAE is also the second largest export destination of India (after US) with an amount of nearly US$ 28 billion for the FY 2021-2022. UAE’s investments in India is around US $ 17-18 billion of which US $ 11.67 billion is estimated to be FDI while the remaining is in the form of portfolio investment. ADIA, the investment authority of UAE too has made some key investments in India. In July 2017, ADIA invested around US $ one billion in National Investment and Infrastructure Fund or NIIFwhich is India’ssovereign investment fund. ADIA has also invested US $400 million in the housing sector and around US $500 million in the renewable and green energy. Dubai- based DP World too has made investments and has signed a MoU with NIIF to invest US$ One billion in ports logistics and river transport. Taking the investment drive forward, Abu Dhabi-based Mubadala Investment Company, sovereign investment entity announced an investment of $ 1.2 billon for a 1.85% equity stake in Reliance Jio in June 2020. ADIA too indicated its intent to invest US$ 750 Million in Reliance Jio. Most recently, in March this year, a trade delegation from the UAE visited Jammu & Kashmir looking for trade and investment opportunities in the state. Remittances from the UAE too form a large part of economic engagement. Remittances from UAE account for 17-18 per cent of India’s total inward remittances. Of the US $87 billion in FY 2020-21, UAE sent back around US $16 billion, which is the second largest after the remittances from the US.

Energy security too forms a key element of strong partnership. After Saudi Arabia and Iraq, UAE is the third largest exporter of crude oil to India. It is committed to ensure a steady supply of oil to India under all circumstances. As a part of this commitment, an agreement was signed during visit of PM Modi to UAE in February 2018. It was signed between Indian Strategic Petroleum Reserves Ltd (ISPRL) and ADNOC of UAE and aims to operationalize the filling up of a strategic petroleum reserve by storing crude oil in the ISPRL underground caverns in India.

This year, both sides completed the negotiations over ‘free trade agreement’ in a record time of 88 days and signed the landmark agreement ‘CEPA’ on 18th February which has laid the foundation for exponential increase in trade and economic partnership. The CEPA which became operational on 01st May, is likely to increase employment opportunities and bilateral trade in goods to US $100 billion in five years and increase trade in services to US $15 billion. Shri Piyush Goyal too while co-chairing the 10th Meeting of the India-UAE High Level Joint Task Force on Investments in Mumbai on 12th October expressed confidence, stating “The momentum between India and the United Arab Emirates (UAE) is exceptional, with numerous prospects for collaboration and rising investments”.

The strong ties which have developed between the two countries over a very short time are unique in today’s era. The chemistry and bond between Modi and MBZ adds a special flavor to it. Both leaders have often gone well beyond the normal protocolsto make exceptional arrangements for each other. In a signal to the Arab world as to how important India is to the region, UAE had invited India’s External Affairs Minister Sushma Swaraj to the OIC Summit in 2019, which it hosted, despite protests from some countries like Pakistan. PM Modi was earlier invited as the keynote speaker at the World Government Summit in February, 2018 in UAE. Immediately thereafter, in March 2018, India was the invited as the 'Guest of Honour' country at the Abu Dhabi Festival (ADF), which is UAE's annual cultural festival. The inauguration of the first Hindu temple in Dubai on 05th October this year is a special gift to the Indian community by UAE. The RuPay card, a key initiative by India in digital payment system, was launched in the UAE on 24th August 2019 at the Emirates Palace, Abu Dhabi, making UAE one of the few countries to have such a tie-up with India. International Yoga day too has been regularly celebrated in UAE since 2016. As a part of enhancing engagement in soft power especially education, India is in talks on opening an IIT in UAE. There is also talk of an Indian Institute of Management (IIM) opening its offshore campus in UAE in near future.

As a part of its broader global outlook, India is seeking deeper engagement and collaboration with the West Asian region of which UAE is an important pillar. The region is however conflict prone and any instability in the region has a direct impact not only on our energy security but also the safety and security of millions of Indians working living in the Gulf region. From a strategic point of view therefore, India has vital stakes in peace, stability and security of the region. UAE is a key voice in the region and is an integral part of all important groupings in the region; GCC, Arab League etc. It also is a part of I2U2 as well as signatory of recently signed Abraham Accords with Israel. With Iran too, UAE is engaged in an effective dialogue. India therefore finds in UAE a perfect partner and an ideal ‘point of contact’ for discussing various issues in the region. Dubai is popularly said to be closer to Delhi/Mumbai in time and money than many other cities within India. Combined with increasing trade relations, greater people to people engagements and charismatic bond between the top leadership, sky is the limit for this special partnership between India and UAE.

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