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Special Content

Issue no 18, 29 July - 04 August 2023

India-UAE Relations on a New High


The art of diplomacy has been the backbone of nations' foreign policies since time immemorial. With India's approach evolving to prioritise its neighbours, both near and far, this evolution has paved the way for international cooperation and mutual development while preserving each nation's unique identity. In the contemporary world of accelerated globalisation, trade and economic collaboration have taken center stage in foreign affairs. A testimony to this burgeoning agenda of progress is the recent visit of Prime Minister Shri Narendra Modi to the UAE, where the iconic Burj Khalifa illuminated in the Indian tricolor offered a warm welcome. The historic and strengthening ties between India and the UAE heralds a future of mutual prosperity and advancement.

 India and the United Arab Emirates could be seen as having historically close ties, which has progressively grown closer with the establishment of the Arab Federation in 1971. The year 1981 marked the first visit of the then Indian Prime Minister, Mrs. Indira Gandhi to the UAE after which there was a hiatus of 34 years, which was broken in 2015 by Prime Minister Shri Narendra Modi's visit in 2015. The recent visit was the fifth visit by PM Modi, when along with a ceremonial welcome, he was accorded the Guard of Honour. These visits have been reciprocated with the President of UAE Sheikh Mohamed bin Zayed Al Nahyan visiting India in 2016 and in 2017, wherein in the latter, he graced the Republic Day celebrations of India as the Chief Guest.

The significance of these visits go beyond the symbolic, to realisation of mutual goals for both countries in economic, social, political and cultural spheres. Economically, the year 2022 witnessed the signing and enforcement of CEPA (Comprehensive Economic Partnership Agreement). Earlier in 2017, the two nations had also ratified a Comprehensive Strategic Partnership. The CEPA goes further than a Free Trade Agreement in solidifying bilateral relations, the various economic facets of such an agreement covers all areas of economic cooperation from trade in goods and services, removing technical barriers to trade, procurement, rules of origin and procedures in customs, to digital trade, investment and infrastructural facilitation as well as a mechanism of dispute settlement. This in the most basic terms, the relaxation of tariffs and duties along with preferred investment statues would lead to increased trade between the two nations, whereby both benefit.

India benefits from the access of markets in as much as 111 subsectors out of a total of 160, which also means the creation of new markets for goods and services from the 'Make in India' programme. Furthermore, there is the generation of new employment opportunities in multiple sectors, specifically gems and jewellery, agroprocessing, medical devices and pharmaceuticals, among others. UAE stands to gain from the market access to India in 100 out of 160 sub-sectors, and exporting opportunities in various service sectors, such as computer related, tourism and travel and others. And in construction, environmental and health services, India has committed to a 100% foreign equity. As of 2023, India has become UAE's second largest trading partner and UAE is India's third largest trading partner and second largest export destination. Since the ratification of CEPA in 2022, there has been a 15% increase in trade between the two nations.

Three significant memorandums have been signed, firstly is the memorandum of understanding signed by the governors of the central banks of both countries in establishing a process to promote the use of local currencies (INR-AED). The second MoU is on developing an interlinking payment and messaging mechanism. Such a system of local currency settlement not only testifies to the mutual trust between two nations, but possibilities of easier and efficient cross border transactions. Furthermore, in the area of investments, the plan of Abu Dhabi Investment Authority to set up its presence in Gujarat International Finance Tec-City has been acknowledged. The third MoU pertains to the establishment of an Indian Institute of Technology- Delhi in Abu Dhabi.

The MoU between the education ministries of both countries as well as with IIT Delhi, signals the increased investment of the countries in their knowledge economy, especially in areas of science, technology, communication and space. Such interest in investment in the knowledge economy has resulted in the increased accordance of golden visa residencies to doctors, engineers and other experts in technological disciplines. In the geo-political arena, both nations play a significant global role. In the year 2023, India holds the presidency for G20 and UAE the presidency of COP28 (United Nations Climate Change Conference 2023, Conference of Parties 28). While India looks forward to host UAE for the G20 Summit in September, UAE holds India's complete confidence and support in COP 28. The countries have mutually extended their support and acknowledgement for each other in other international platforms too. Both India and UAE are also part of other plurilateral forums such as the I2U2 (grouping of India, Israel, US and UAE) and the trilateral cooperation initiative of UAEFrance-India. In addition, leaders of both the countries share a collective vision of global justice and a rule-based order. The nations have stuck together as nonpermanent members of the United Nations Security Council (UNSC), including, sharing a similar stand on abstaining from voting in the RussianUkraine crisis. UAE has also extended their support for India in its call for reforms in the UNSC, and backing for India's endeavour for a permanent seat at the UNSC.

In the area of environment and energy, the countries share a partnership in their green projects, with a common perspective of sustainable development and common but differentiated responsibilities. This stands for a focus on green initiatives and actions to mitigate the effects of climate change, but at the same time, promoting development. Along with investments in the area of energy (Green Hydrogen, solar energy and grid connectivity), discussions were held on the affirmation of the need for food security and thus to expand on food and agricultural trade and to develop food corridors. Further, in the area of health too, greater investment and exchange between the two countries has been welcomed.

Cooperation in the area of defence is another dimension in the UAE India relations. This was marked by the setting up of the Joint Defence Cooperation Committee (JDCC) in 2003. The notable areas covered include training as well as supply of inventory. A Joint India UAE air force exercise was conducted for the first time in September 2008 after which India frequents in participation of the International Defence Exhibition held in Abu Dhabi every two years. Furthermore the maritime security concerns of both nations align especially in relation to the space and interest of the Indian Ocean region. Both countries recognise the need for cooperation in order to overcome the traditional (military, threats from other states) and non-traditional threats (natural disaster, piracy, maritime terrorism, pollution, drug trafficking, illegal migration and illegal and unregulated fishing and other trading activities) in maritime security. Ensuring cooperation in maintaining security and enforcement of international norms of conduct in the maritime provides for not only a protection of national interests and identity but also smoother transport in goods and services, promoting overall development.

In the India UAE joint statement released after the Indian Prime Minister’s visit, the countries reiterated their commitment to cooperation on fighting global terrorism and extremism. In the previous visit of the Prime Minister, he had condemned the terror attacks on UAE and maintained how both nations stand shoulder to shoulder to combact terrorism. The guiding principles of peace, moderation, co-existence and toleration among people were emphasised along with the need to get rid of all forms of extremism (hate speech, incitement, discrimination), both nationally and internationally. This commitment has resulted in greater cooperation in fields of defence and security as mentioned above.

The relations between India and UAE extend beyond the economy to social and cultural spheres as well. A large number of Indians are engaged in white collar jobs, as well as occupations in manufacturing, transport, technical and other professionals, even producing many Dubai based Indian billionaires. A further impact of the large presence of Indian diaspora in UAE is the acknowledgement and toleration of Indian cultures in UAE. Schools with Indian curriculums have been established as well as places of worship such as temples and Gurudwaras, cremation grounds along with an array of cultural organisations and associations. These signal the deep respect held for Indians and Indian culture at the UAE and its tolerance. Moreover, the support and aid extended by expatriates and the government during the 2018 Kerala floods are noteworthy.

Therefore, the bilateral relations between India and UAE which are centuries old has evolved from rudimentary forms to a well-cemented partnership, which is evident from the multiple agreements and partnership as well as diplomatic visits of high and lower levels. This close relationship extends from various sectors of economy, military, socio-cultural as well as geo-political. Their benefits also extends to a wide range of spheres from increased trade and employment opportunities to investment opportunities and a partner in geo-political aspirations ranging from a common outlook towards sustainable development, climate change, combating terrorism, endorsing maritime trade and security and promoting peace and stability in the area. In the coming years, these close ties in various spheres could be assumed to grow closer and smoother thereby providing opportunities and promoting prosperity in the region and beyond.

(The author is a Research Scholar, Department of Poltical Science, Delhi University. You can send us your comments at feedback.employment news@gmail.com)

Views expressed are personal