Relationship with UAE is one of India’s most significant bilateral relationships.Β UAE was the first country with which India signed a Comprehensive Economic Partnership. UAE is India’s third largest trading partner behind the US and China, and ahead of Germany, France, UK & Japan . Last year, India-UAE trade was $85Β billionΒ . UAE is the second largest export destination for Indian goods and services. UAE hasΒ emergedΒ as India’s fourth largestΒ largestΒ source of foreign investment.
Understanding Effect on India
As per India’s Ministry of External Affairs (MEA), there are nearly 3.425 million Indians residing in the UAE. The UAE ranks No. 1 in non-resident Indian (NRI) population in the world followed by Saudi Arabia (2.6 million) & the USA (1.3 million). Indians constitute more than 1/3rd of UAE’s population. Kerala accounts for nearly 50% of NRIs in UAE. Modi has invested mu ch time and energy in this relationship. This was PM Modi’s fifth trip to UAE as PM . And it may not be the last this year. When Modi visited UAE in 2015, it was the first visit by an Indian PM in 34 years. The momentum of high level exchanges will continue with UAE being invited by India for G-20; Modi likely to attend COP-28 meet being hosted by UAE at the end of the year.
PM Modiβs UAE visit will likely strengthen India-UAE Partnership. PM Modi met the President and ruler, H.H. Sheikh Mohamed bin Zayed Al Nahyan. He also met Dr Sultan Al Jaber President-designate of COP 28. The two countries exchanged various agreements in health, defence, culture & fintech among others.Β
An important agreement on trade settlement in respective national currencies (INR & Dirham) was signed. Local currency trade will likely boost trade, lower transaction costs & reduce settlement time. It will promote exports & perhaps create a model of bilateral trade which can be replicated.Β
Abu Dhabi Investment Authority, the worldβs second largest sovereign wealth fund, which has been investing in infrastructure (highways, telecom & renewable energy) will open an office in GIFT City. This is a positive indication of their willingness to double down on their investment in high impact sectors in India. Indian Institute of Technology, Delhi will open a campus in Abu Dhabi.Β
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India had strong historical, cultural and trade with the wider region. Thousands of years back, traders from Gujarat, Kutch, Sindh & Malabar coast traded with Oman, Aden, Muscat & Baghdad. Modi is revitalising that relationship adding much dynamism to it, says a former Indian Ambassador to UAE.Β
