The Expanding India-UAE Relations – From Cooperation to Collaboration

| Aayush Pal

India and the UAE established diplomatic relations in 1972. The greater push was achieved in bilateral relations with the visit of India’s Prime Minister to the UAE in August 2015 marking the beginning of a new strategic partnership between the two countries. Further, during the visit of the Crown Prince of Abu Dhabi to India in January 2017, who was also the chief guest at India’s Republic Day celebrations, it was agreed that bilateral relations were to be upgraded to a comprehensive strategic partnership. This gave momentum to launch negotiations for an India-UAE comprehensive economic partnership agreement. The UAE has emerged as an important economic hub not just within the context of the Middle East/West Asia, but globally too.

The UAE, due to its strategic location, has emerged as an important economic centre in the world. In recent years, the UAE, through its ‘Vision 2021’, has sought to diversify its economy and reduce its dependency on oil. According to a World Trade Organisation document, since 2012 its growth has been led by the non-hydrocarbon sectors reflecting the successful diversification of the economy. Although the UAE has diversified its economy, the hydrocarbon sector remains very important followed by services and manufacturing. Within services, financial services, wholesale and retail trade, and real estate and business services are the main contributors.

Trade Ties

India-UAE economic and commercial relations contribute to the stability and strength of a rapidly diversifying and deepening bilateral relationship between the two countries. Both sides are striving to further strengthen these ties for mutual benefit. India-UAE trade, which was valued at US$ 180 million per annum in the 1970s, is around US$ 73 billion today, making UAE, India’s third largest trading partner for the year 2021-22 after US and China. Moreover, UAE is the second largest export destination of India (after the US) with an amount of over US$ 28 billion for the year 2021-22.  For the UAE, India is the second largest trading partner for the year 2021 with an amount of around US$ 45 billion (non-oil trade). 

Both nations signed the Comprehensive Economic Partnership Agreement (CEPA) on 18th February 2022 during the Virtual Summit between Hon’ble Prime Minister  Narendra Modi and H.H. President Sheikh Mohamed bin Zayed al Nahyan. The agreement entered into force on 1st May 2022. CEPA will unlock new opportunities in bilateral trade and it is expected to increase the bilateral trade in goods to US $100 bn within five years and trade in services to US $ 15 bn.

The UAE’s investment in India is estimated to be around US $ 20-21 billion of which US 15.18 billion is in the form of FDI while the remaining is portfolio investment. UAE is the 7th biggest investor in India in terms of FDI.  Abu Dhabi Investment Authority (ADIA) is the principal sovereign wealth fund of the UAE and one of the world’s largest wealth funds.  ADIA has committed to invest US $ 75 billion in India’s infrastructure sector.  In 2020, GOI announced several measures to facilitate and further ease investments by ADIA and other sovereign funds from the UAE. The UAE entities are expected to invest up to USD 7 billion in India’s food sector in the next three years, in the development of the India-UAE food corridor,  development of cold storage, warehousing, food-processing, fisheries and poultry with the objective of tripling the value of UAE’s food imports from India in five years. 

Defence Cooperation 

Defence cooperation between the two countries is steered through a Joint Defence Co-operation Committee (JDCC) at the Ministry level and Naval Staff Talks at the HQ level which identify new areas of cooperation between the two nations. A permanent resident Defence Adviser (DA) has been posted to this Mission with effect from March 2013. After the establishment of the DA’s office, bilateral defence cooperation has been strengthened further, notably in the field of defence training and regular exchange programmes. Cooperation in the field of Defence, Security and Energy has shown a positive change after the VVIP exchange of visits in the last two years.

In recent years, IAF participated in bilateral exercises with their UAE counterparts in May 2016. The UAE Air Force Officers participated as observers in the Trilateral Air Exercise on Humanitarian Assistance & Disaster Relief (HADR) exercises held in March 2018. Two Indian Navy Ships participated in the maiden IN-UAEN Bilateral Exercise in March 2018. Indian Coast Guards have made a number of port calls to Abu Dhabi and Dubai, along with the associated PASSEX. Indian Naval ships have been regularly participating in IDEX/NAVDEX held in Abu Dhabi biennially. Three different delegations from UAE visited the DefExpo 2018 in India in Feb 2018 led by UAE MoS for Defence Affairs, who later made an official visit to India in Oct 2018. A large delegation from the MoD of UAE participated in Aero India at Bangalore in Feb 2019. Vice Chief of Air Staff, IAF along with the delegation attended the 9th Dubai International Air Chiefs’ Conference and Dubai Air Show in Nov 2019. For the first time, an Indian pavilion was set up at the Dubai Airshow with HAL, DRDO and BDL as the participating DPSUs. In addition, there are a number of delegation visits from both sides to each other’s Centres of Excellence.

Cultural Ties

Emiratis are familiar with and receptive to Indian culture. Recognition of Indian culture by Emiratis was visible when India was declared the ‘Guest of Honour Country’ for the prestigious 2018 edition of the Abu Dhabi Festival (ADF). The selection of India as the Country of Honour in alignment with the official theme of the festival called “The Year of Zayed”, highlighted the cultural bond between the two countries. The Abu Dhabi International Book Fair (ADIBF) of 2019 was yet another vibrant cultural event where India was chosen as Guest of Honour. ADIBF 2019 cultural programme concluded with a spotlight on Indian literature and culture.  

On 24 August 2019 Prime Minister Narendra Modi and Sheikh Mohamed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, released Postal Stamps on Mahatma Gandhi to commemorate his 150th birth anniversary. These postal stamps from Emirates Post of the UAE were issued at the Presidential Palace in Abu Dhabi to honour the life and philosophy of the great leader.                                                                              

The Expo2020 Dubai has been a catalyst for a robust collaboration between India and the UAE. Besides showcasing technological innovations and capabilities of robust India, the Expo has played a pivotal role in exhibiting Indian culture to the Arabic society. India Pavilion emerged as one of the most vibrant cultural hubs showcasing numerous cultural performances, art, movies, cuisines and culinary and other items of diverse India. 

What awaits India and UAE ties

1) Manifold Benefits of India-UAE Trade Agreements: With India’s newfound strength in exports, a trade agreement with an important country such as the UAE would help sustain the growth momentum.

2) As we are witnessing a big turnaround in manufacturing, the UAE would be an attractive export market for Indian electronics, automobiles, and other engineering products.

3) As both the UAE and India are aggressively pursuing FTAs with several important countries, not only companies from these two countries but also MNCs from other geographies too would find the UAE and India an attractive market to invest in.

4) Paving the Way for Better Relations with the GCC: The UAE is a party to several regional and bilateral FTAs, including with countries in the GCC.

5) As part of the GCC, the UAE has strong economic ties with Saudi Arabia, Kuwait, Bahrain, and Oman and shares a common market and customs union with these nations.

6) Under the Greater Arab Free Trade Area (GAFTA) Agreement, the UAE has free trade access to Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, Jordan, Egypt, Iraq, Lebanon, Morocco, Tunisia, Palestine, Syria, Libya, and Yemen.

Presently, India and UAE ties look promising. With development and cooperation happening in multiple areas, the ties are only bound to strengthen and move forward for mutual benefits.

(The author is a post-graduate student in International Relations at Kalinga university, Raipur. The opinions expressed are the author’s own)

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