On his return from his two-day visit to France (July 14-15, 2023), Indian PM Narendra Modi stopped over at the United Arab Emirates (UAE) (July 15, 2023). This was the Indian PM’s 5th visit to UAE in 8 years and reiterates the increasing strategic and economic importance of the UAE for India.
The Indian PM held talks with the UAE President Sheikh Mohamed bin Zayed Al Nahyan on several issues including trade, economy, energy and defence.
UAE for long has been an important pillar of India’s energy security but the relationship in recent years has moved towards being a multi-dimensional one.
One of the important landmarks in the India-UAE relationship has been the CEPA which has pushed bilateral trade to $85 billion.
UAE has emerged as India’s third largest partner, while India is UAE’s second largest trading partner.
India-UAE people to people linkages
People to people linkages are an important component of the bilateral relationship. There are an estimated 3.5 million Indians in the UAE as of 2021. Like many other countries, migration to UAE is no longer restricted to a handful of states, or any specific economic profession/group. In June 2023, UAE opened its fourth consulate in Hyderabad (capital of Telangana). Apart from the UAE embassy in Delhi, the Gulf nation has consulates in Mumbai and Thiruvananthapuram.
For a long while, India has been receiving a significant percentage of remittances from the Gulf Cooperation Council (GCC) in general and the UAE in particular. In recent years, in the aftermath of the COVID-19 pandemic, there has been a drop in remittances from GCC.
The role of Indian diaspora in UAE’s progress was acknowledged in the joint statement issued after the meeting between Narendra Modi and the UAE President Sheikh Mohamed bin Zayed Al Nahyan
Here it would be pertinent to point out that UAE has been trying to attract not just High Networth Individuals (HNIs) via the Green and Golden visa scheme from India, but also skilled researchers and other talented individuals. One of the important Memoranda of Understanding (MoUs) signed in the presence of Prime Minister Modi and made was the setting up of an IIT (Indian Institute of Technology) Delhi in Abu Dhabi (capital of UAE).
MoUs for trade in Rupee-Dirham and interlinking payment systems of both countries
Two other important MOUs were signed between The Reserve Bank of India and the Central Bank of UAE (CBUAE) in the presence of PM, Modi and the UAE President. While the first MOU sought to promote trade in local currencies (Rupee and Dirham), the second MOU would interlink India’s payment system UPI with the Instant Payment Platform (IPP) of UAE. Both India and UAE have been looking to trade in local currencies and the linking of India’s UPI to IPP is also important in the context of cross border transactions. (this will be useful for the citizens of both countries especially Indian diaspora in Gulf as well as tourists).
Both sides also sought to strengthen their cooperation in green energy and solar energy, while an increase in investment in India’s Strategic Petroleum Reserve programme was also discussed.
India-UAE ties: Beyond the bilateral sphere
India’s ties with UAE are not restricted to bilateral sphere. Both countries are part of the I2U2 also referred to as West Asian Quad (other members are US and Israel). Under the umbrella of Quad, UAE will be investing $2 billion in food parks in India. India-France and UAE have also formed a trilateral. One of the important areas of cooperation between the three countries is clean energy and climate change
Multilateralism
While India holds the presidency of G20 in 2023, UAE holds the COP 28 Presidency and will be hosting. The 2023 UNFCCC will be held from November to December 2023 at Dubai and Indian PM ensured India’s support. The joint statement issued after the meeting between Modi and the UAE President stated:
“The leaders acknowledged the joint work on issues of climate change, particularly during India’s presidency of the G20 and the UAE’s presidency of COP28. They resolved to work together to make COP28 a success for all”.
While referring to the importance of multilateralism, both sides also referred to the coordination on important UN Security council matters. India and UAE also agreed for the need to strengthen defence cooperation as well as to work towards maritime cooperation.
As a result of changing geopolitical situation and economic architecture, the India-UAE relationship has strengthened and is no longer restricted to a particular sphere. Cooperation on issues of global importance, like climate change, on multilateral platforms as well as the decision to trade in local currencies is a reiteration of how both countries realize the dire need for a greater push to bilateral relations. Prime
[Photo by Minister’s Office, India, via Wikimedia Commons]
The views and opinions expressed in this article are those of the author.
Tridivesh Singh Maini is a New Delhi based analyst interested in Punjab-Punjab linkages as well as Partition Studies. Maini co-authored ‘Humanity Amidst Insanity: Hope During and After the Indo-Pak Partition’ (New Delhi: UBSPD, 2008) with Tahir Malik and Ali Farooq Malik. He can be reached at [email protected].
