Wednesday, January 25, 2017

  • Mohammed Bin Zayed Al Nahyan, the crown prince of Abu Dhabi and the deputy supreme commander of the United Arab Emirates armed forces will meet with Prime Minister Narendra Modi Wednesday noon. 
  • He will be the chief guest at the Republic Day parade. 
  • It will be the second time a leader from a Persian Gulf country will be attending the Republic Day parade after king of Saudi Arabia in 2006.

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The momentum of cooperation between India and United Arab Emirates has accelerated over the last few years and the two countries are seeking to elevate the bilateral relationship to higher levels.

Factoid to reflect the India - UAE relations !

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1) $50 billion
That is the bilateral trade between India and the UAE. The growth of trade has been very impressive over the years. The trade figure was mere $128 million, 30 years ago. The Gulf nation is India’s third biggest trading partner after the USA and China. India and the UAE now want to double that figure.

2) 2.8 million passport holders
That is the number of Indian passport holders in that country. They are the biggest expatriate community in the UAE which proudly proclaims of being home to ‘200 nationalities”. The total remittance from the UAE is estimated to be $13.6 billion.

3) $10 billion
That is the total investment the UAE has made in India. Out of this, $4 billion is in the form of the foreign direct investment. In the last 11 months, the UAE has pumped in one billion dollars in FDI.

4) $75 billion
This is the money the UAE promised to pump into India’s infrastructure development from its sovereign wealth fund.


 What is UAE interested for in INDIA ?

  • The UAE is interested in ports, highways, airports in India. 
  • The UAE’s big sovereign wealth funds, Abu Dhabi Investment Authority, Mubadla-IPIC want to make India their next big destination. Can India make it worth their while?

 Impediments and challenges Modi Government will have to tackle !
  • India has a poor history here – the road is strewn with the debris of Etisalat, Emaar and DB World, all of whom bear the scars of previous forays into India. 
  • So the Modi government has a tougher job making them second time lucky. 
  • Talking to senior ministers in the UAE in the past days, it is clear they want to go into India. 
  • But the maze of central and state regulations, land acquisition, unpredictability in tax regimes keeps them up at night. China’s already ahead of India here, no surprise.

Why does India requires UAE more rather than the other way round >?

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  • India frankly, needs the UAE more than the other way round. A large market is less important than where the market is headed – high-tech manufacturing, creative industries, innovation pods, not merely consumers.
  • The UAE recognised this ages ago and is investing massively in the future. All you have to do is sit in a driverless pod in Masdar City to get to your destination and see the possibilities of a future where you can store solar energy in batteries not yet invented, or build zero carbon homes for future families. 
  • That ought to be our future, we need partners who have already started on this journey. The Saudis only plan to diversify from oil. Dubai’s revenues have already whittled down to only 5% oil, Abu Dhabi is down to the low 60s.

Looking beyond PAKISTAN !

  • It’s important for both India and the UAE to look beyond Pakistan. With 8 million Indians living and working, making tons of money, innovating, creating, and most important, peaceful, it’s inevitable that these countries will compare them to the crime-ridden Pakistanis and come to the only logical conclusion. 
  • The UAE too needs to wean itself away from Pakistan’s terror syndicates all of whom had/have huge business interests in Dubai and Abu Dhabi – read Dawood Ibrahim, and a slew of other smaller ones. Senior officials in the UAE swear they have begun. Slow steps, but in the past three years, there have been no high level Pakistani official visits to the UAE.

How has been the affair between UAE and Pakistan recently?

  • Over the decades, the UAE has traditionally been close to Pakistan — one reason for this has been the lack of effort on the part of successive Governments in New Delhi to develop bonds with the Gulf. 
  • So, while Pakistan-based militants have been causing terrorism in India since long, there had been no strong words of condemnation from the UAE. 
  • However, with the new-found warmth, the UAE has been quick to not just condemn the terror attacks in India but also back India's response (it supported India's surgical strike inside Pakistan-occupied Kashmir following the terror attack by Pakistan-based militants at an Indian Army camp in Uri in Jammu & Kashmir) late last year.
  • Support to US drones targeting terrorists (and unfortunately, many civilians) in Pakistan was an early indication of Abu Dhabi’s lack of faith in Islamabad’s ability to crack down on terrorism.
  • The killing of five UAE diplomats in Kandahar by what appears to be a joint operation between the Haqqani network and Pakistan’s friendly neighbourhood ISI has stunned this state. 
  • They supported the Taliban, and even today hesitate to criticise them. But they can’t wrap their heads around the fact that Sirajuddin Haqqani is also the top gun of the Taliban today. 
  • It brings them uncomfortably close to their other big fear – of being overwhelmed by Daesh or whatever is its successor.
  • Abu Dhabi did not take Islamabad’s refusal to join the battle in Yemen well.

Role of India in West Asia in near future ?
  •  India itself is looking at playing a greater security role in this region, and therefore defence and security cooperation with the UAE is big. 
  • The Gulf Arabs are simultaneously looking at a less-interested US, more belligerent Iran and terrorism challenges that could upend their carefully built economic marvel. 
  • That’s where India should come in. Indian initiatives in Yemen and Iraq have displayed Indian capabilities, India now has the space to grow its security footprint further.

Where does India score over China ?

China is bigger, more efficient, a bigger market. Why then do the Gulf Arabs look at India? 
  • First, history. 
  • Second, China’s close relations with Iran and Pakistan. 
  • Third, China’s strategic rival, US, is India’s strategic ally. It makes a world of difference.

Additional Reading !! 

UAE optimistic over investments in India: Economy Minister Mansouri

Business Standard-23-Jan-2017
"We are optimistic and very positive of the relationship between UAE and India and very encouraged by the signs of relationship that we have ...

India may assist UAE in air defence system

Economic Times-19-Jan-2017
Robust defence ties is a key pillar of Comprehensive Strategic Partnership that India and the UAE plan to conclude during Crown Prince ...

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