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Prime Minister Narendra Modi’s recent journey to the UAE, marking his seventh visit to the Emirates since assuming office in 2014, transcends the ordinary framework of bilateral engagements. This visit underscores the Indian government’s intent to spotlight the exceptional stature and significance of the UAE within the Gulf region. Furthermore, the inauguration of the BAPS Hindu Mandir in Abu Dhabi by Prime Minister Modi stands out as a landmark event, heralding a new era of interfaith harmony and cultural collaboration between India and the UAE.
Introduction:
“I am eager to meet my brother Highness Sheikh Mohamed bin Zayed Al Nahyan” – PM Modi, Feb, 2024
The India-UAE partnership, with roots in ancient maritime trade, has evolved into a strategic alliance, significantly enhanced by the contributions of the 3.5 million-strong Indian expatriate community in the UAE. This relationship was notably advanced by Prime Minister Narendra Modi’s landmark visit in 2015, which initiated a comprehensive strategic partnership, further emphasized by his seventh visit, during which he inaugurated the first Hindu temple in the UAE. These actions highlight the profound cultural integration and mutual respect between the two nations.
Modi’s engagements, including his participation in the World Government Summit and meetings with UAE’s top officials, underscore the dynamic and evolving nature of this bilateral relationship. These interactions serve as milestones, demonstrating the deep connections and shared visions for the future.
This robust partnership is a testament to high-level engagements and strategic collaborations, setting a model for international cooperation based on mutual respect and shared goals. As India and the UAE navigate the 21st century’s complexities, their relationship continues to be a benchmark for bilateral cooperation, indicating a future of ongoing collaboration and mutual growth.
Historical Context:
The genesis of India-UAE relations can be traced back to ancient maritime trade across the Indian Ocean, where Indian seafarers exchanged spices, textiles, and precious stones with the Arabian Gulf, bringing back pearls, dates, and rich cultural influences. This trade was more than economic; it fostered cultural exchanges and mutual respect, with the Malabar Coast and the Arabian Peninsula acting as vibrant trade hubs. Indian merchants significantly contributed to the Gulf’s pearl industry, laying the groundwork for a relationship that predates modern nation boundaries.
The discovery of oil in the 20th century and the UAE’s formation in 1971 heralded a new chapter in India-UAE ties. India, recognizing the UAE’s strategic importance, was among the first to establish diplomatic relations. This move, grounded in historical connections, initiated a comprehensive relationship spanning political, economic, and cultural domains, demonstrating foresight and a desire for structured engagement in a changing global landscape.
Prime Minister Narendra Modi’s visit in 2015, the first by an Indian Prime Minister in over three decades, marked a significant step in bolstering cooperation across trade, defense, and energy sectors. This visit underscored the UAE’s role in India’s neighborhood strategy, leading to key developments like the UAE-India Comprehensive Economic Partnership Agreement (CEPA) and a surge in investment flows. Modi’s efforts have showcased a dynamic and mutually beneficial partnership, aimed at fostering mutual growth and regional stability, reinforcing the deep-rooted connections between the two nations.
Economic Ties: India-UAE in a Nutshell
Trade Relations: The trade relationship between India and the UAE has reached a remarkable USD 85 billion in 2022-23, establishing the UAE as India’s third-largest trading partner and second-largest export destination. This trade encompasses a wide range of commodities, including crude oil, precious metals, textiles, and food items. The landmark Comprehensive Economic Partnership Agreement (CEPA) of 2022 aims to propel this further, targeting over USD 100 billion in merchandise trade and USD 15 billion in services trade within the next five years. This strategic move highlights the depth of their economic interconnection and the mutual ambition to expand trade boundaries.
Investment Flows: The UAE’s investment in India, totaling USD 11.67 billion, positions it as a significant investor, focusing on sectors such as energy, real estate, and technology. Indian investments reciprocate, particularly in manufacturing, tourism, hospitality, and education, benefiting from the UAE’s strategic location as a MENA region gateway. Financial transactions are streamlined by initiatives like the Rupee-Dirham settlement system and the acceptance of the RuPay card, facilitating economic exchanges.
Joint Ventures and Collaborations: Energy, technology, and innovation sectors have seen flourishing partnerships, including renewable energy projects and AI development, illustrating the dynamic economic engagement. The Bharat Mart initiative for Indian MSMEs underscores the commitment to expanding trade ties, demonstrating the multifaceted nature of this economic relationship.
In essence, the economic ties between India and the UAE are characterized by vibrant trade, strategic investments, and collaborative innovation, setting a precedent for international economic cooperation.
Strengthening Bridges: Advancing India-UAE Relations through Strategic Partnerships, Cultural Harmony, and Technological Innovations
The strategic and defense collaboration between India and the United Arab Emirates (UAE) has significantly enhanced, marking a new era in regional security and stability. The inaugural “Desert Cyclone” joint military exercise, held from January 2nd to 15th, 2024, in Rajasthan, India, is a testament to this strengthened relationship. Engaging 45 personnel from each country, the exercise aimed at improving interoperability in desert terrains, emphasizing the nations’ commitment to peacekeeping and stability. Activities like establishing a Joint Surveillance Centre and conducting Cordon and Search Operations underline the growing security ties and shared objectives.
Counterterrorism also plays a crucial role in India-UAE ties, with both nations making strides in combating terror financing and enhancing surveillance on terrorist travel routes. Collaborative efforts at the Financial Action Task Force (FATF) level and the development of shared immigration databases reflect a unified approach to eliminating terrorism.
The Indian expatriate community in the UAE, numbering over 3.5 million, acts as a cultural link, contributing significantly to the UAE’s socio-economic landscape. Cultural exchanges, such as India’s highlighted role at the Abu Dhabi International Book Fair 2019 and the popularity of Indian cinema, foster mutual respect and understanding.
Recent diplomatic visits have solidified defense, economic, and cultural connections, with key developments like the “Desert Eagle II” air combat exercise and Indian investments in the UAE’s oil sector. The establishment of the first Hindu Temple in Abu Dhabi and collaborative efforts in worker welfare highlight the deep cultural integration and cooperation between the two nations.
Space exploration and digital innovation present new frontiers for collaboration, with the MoU between ISRO and UAESA symbolizing a commitment to joint space missions and technological partnership. Furthermore, the India-UAE cooperation extends to significant multilateral projects, including the India-Middle East Economic Corridor and the I2U2 group, showcasing their strategic alignment and shared visions for regional prosperity.
In essence, the evolving India-UAE partnership, rooted in military, counterterrorism, cultural, and technological cooperation, underscores a robust bilateral relationship geared towards enhancing regional security, fostering mutual respect, and paving the way for future collaborative successes in addressing global challenges.
Challenges and Areas for Growth in India-UAE Relations
The partnership between India and the UAE is a multifaceted one, showcasing strong economic ties, shared goals for sustainable development, and mutual security interests. However, this relationship faces challenges including trade barriers, labor issues, and regional security concerns that call for a nuanced strategy to deepen collaboration and overcome growth obstacles.
Trade barriers are a significant hurdle, with India’s exports to the UAE impacted by non-tariff barriers such as Sanitary and Phytosanitary (SPS) measures and Technical Barriers to Trade (TBT), particularly affecting the poultry, meat, and processed food sectors. The mandatory Halal certification, for instance, has led to a nearly 30% drop in Indian processed food exports to the UAE, highlighting a critical area for policy dialogue.
The influence of China’s economy in the UAE, marked by strategic investments and low-interest loans, poses a challenge to India’s economic interests, necessitating a reassessment and enhancement of India’s economic strategies in the Middle East.
Labor and human rights issues, particularly the Kafala system in the UAE, raise concerns over the treatment of Indian migrant workers, including passport confiscation and delayed wages, necessitating actions to ensure their welfare and ethical bilateral labor relations.
Security and diplomatic concerns arise from the UAE’s financial assistance to Pakistan, given Pakistan’s history with cross-border terrorism, and regional conflicts, such as tensions between Iran and Arab nations, and between Israel and Hamas, which could affect initiatives like the India-Middle East-Europe Economic Corridor (IMEC).
Addressing these challenges, the India-UAE partnership holds significant potential for growth through comprehensive economic engagement, leveraging the Comprehensive Economic Partnership Agreement (CEPA) to correct trade imbalances and enhance market access. Opportunities for diversification in non-traditional sectors, sustainable development projects in renewable energy, water conservation, and urban development are avenues for further collaboration. Additionally, enhancing security cooperation through joint military exercises, intelligence sharing, and cyber defense initiatives is crucial for regional stability, promising a secure and mutually beneficial relationship bolstered by advanced technology transfers and joint production efforts.
Future Outlook
The strategic partnership between India and the United Arab Emirates (UAE) is advancing rapidly, underscored by the Comprehensive Strategic Partnership Agreement of 2017, which marks a commitment to deepen collaboration across various sectors. This relationship has economic cooperation at its core, with the UAE being one of India’s leading trading partners. The expectation that trade between the two countries will exceed $100 billion by 2025 is spurred by the Comprehensive Economic Partnership Agreement (CEPA), designed to minimize trade barriers and boost investment. Additionally, the UAE’s potential $75 billion investment in India’s infrastructure through the UAE-India Infrastructure Investment Fund demonstrates a shared interest in fostering economic growth and modernizing infrastructure.
The scope for growth in the India-UAE relationship extends to healthcare, artificial intelligence (AI), and education. Opportunities in healthcare include collaboration in services, telemedicine, and medical tourism, capitalizing on India’s medical expertise and the UAE’s healthcare infrastructure. In AI, joint initiatives aim to advance healthcare, education, and smart cities, promoting innovation and skill development. The education sector offers prospects for collaborative programs and exchanges, contributing to sustainable development. As both countries face the 21st century’s challenges, their partnership promises significant regional benefits, embodying a model for fostering economic growth, innovation, and stability through collaborative international relations.
Conclusion
The India-UAE relationship has evolved from traditional diplomatic ties to a deep strategic alliance, driven by shared goals and mutual respect. This partnership extends beyond economic and political domains, highlighting cultural integration, technological cooperation, and interfaith harmony. Prime Minister Narendra Modi’s visits, including the inauguration of the first Hindu temple in Abu Dhabi, underscore the cultural and diverse values both nations hold dear.
Strategic efforts like the Comprehensive Economic Partnership Agreement, along with collaborations in defense, space, and digital innovation, reflect a commitment to leveraging growth and security opportunities. This alliance sets a global example, merging economic development, technological progress, and cultural exchange to forge a robust and prosperous future. The partnership is also committed to overcoming challenges in trade, labor rights, and regional security through cooperation and understanding.
The future of India-UAE relations looks promising, with potential growth in healthcare, artificial intelligence, and education, aiming to benefit both societies. Thus, the India-UAE bond is more than strategic cooperation; it’s a celebration of shared ambitions, heralding a future of peace, prosperity, and mutual respect.
