Spotlight- Bilateral Relationship between India – United Arab Emirates | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Introduction

One of the key foreign policy priorities of government has been to expand overall engagement to the Gulf region which is home to over 8 million Indians that is one of the largest concentration of migrants anywhere in the world. We have seen rapid upswing in India’s corporation in Saudi Arabia, Oman, Qatar, Iran and with the United Arab Emirates in the last few years. The relations with the United Arab Emirates have moved forward in an unprecedented pace since prime minister’s first visit to the gulf nation in August 2015. The visit actually marked the beginning of a new comprehensive and strategic partnership between the two countries

Bilateral Relations

• Bilateral trade with UAE stood at around USD 59 billion last year.
• India and the United Arab Emirates have signed a Comprehensive Economic Partnership Agreement (CEPA).
• The bilateral trade pact is India’s first in the region and the first comprehensive trade agreement with any country in a decade.
• Around 3 million Indians are living harmoniously in the UAE.
• As India seeks to enhance economic engagement and deepen security cooperation with the Gulf, it finds a willing partner in the UAE.
• As UAE ‘Look[s] East’ to find partners for its economic growth and with security concerns emanating from turmoil in West Asia and growing threat from terrorism, it finds a natural partner in India.
• UAE has a special place due to its business-friendly atmosphere, willingness to invest in the Indian economy and its important role in maintaining peace and stability in the region.

Establishing an Enduring Link:

• The UAE occupies a key place in India’s West Asia policy.
• The high-level visit from both sides has given a new impetus to this partnership.
• In 2017 the two sides signed the agreement on Comprehensive Strategic Partnership (CSP).

UAE’s tilt towards India

• Geopolitical conditions as Iran is threatening continuously to close the Strait of Hormuz in case there is a conflict with Saudi Arabia or US. This will adversely affect UAE as well.
• UAE saw Pakistan as a partner and incorporated a deep economic and security relationship with it. But in the present day, Pakistan does not seem to be of much help to UAE. Already facing internal issues, Pakistan failed to come to the aid of Saudi Arabia in its war against Iran-backed rebels in Yemen and has been unable to curb jihadists operating from its land across West Asia.
• India is an important destination for oil and energy purchase as the US is on the way of becoming hydrocarbon independent. UAE’s massive sovereign wealth funds can act as a great resource in the development of infrastructure in India.
• There has been a rising convergence between India and UAE on the terror issue and both the countries talked of the need to combat terror groups without any discrimination given the fact that five UAE diplomats were killed in an attack in Kandahar in Afghanistan.
• Countries like Syria, Iraq, Libya and Yemen are suffering from violent conflicts. The Gulf Cooperation Council (GCC) has not produced expected results.

Economic Relations:

• Trade and commerce forms the backbone of the bilateral relations.
• UAE has been one of India’s leading sources of FDIs.
• UAE is India’s third largest trade partner after China and the United States.
• The UAE accounts for 8 percent of India’s oil imports and was fifth largest supplier of crude oil to India.

Security and Defence Cooperation:

• The two countries have a common interest in ensuing maritime security in the Indian Ocean and the Gulf region.
• Another significant pillar of India-UAE ties is reflected in their growing cooperation in security and defense sector.
• With the spread of radicalism in Gulf and South Asia, India looks to enhance security cooperation with UAE to counter terrorist threats and combat radicalization.

Concerns

• As far as investments are concerned, slow implementation from Indian side is a major obstacle.
• The bilateral trade has come down significantly in the past years.
• It has been noticed that workers from other nationalities including Filipinos and Bangladeshis are replacing Indian workers.

Way Forward

• India needs to ensure the execution of the investment projects with required expertise.
• Potential areas to enhance bilateral trade include defense trade, food and agricultural products as well as automobiles.
• Medical tourism can be an important area where India can attract Emiratis.
• Indian companies with expertise in renewable energy sector can invest in UAE.
• In defense sector, there is a need to further enhance cooperation through joint training programmes.

Conclusion

• There are further untapped potentials in the arena of renewable energy. The cost for production and transmission of solar energy in the UAE are a fraction to that of India and this is a priority area for the UAE government.
• India-UAE relations has become a pivot of India’s Extended Neighborhood and Look West Policy in the region.
• Shared economic visions and geopolitical outlooks have spurred the two sides to seek to expand cooperation across multiple domains, notably in investment, technology and the knowledge economy, and defense and security.