India-UAE Strategic Partnership

  • India-UAE Relations are deeply rooted in history and strategic cooperation which is driven by mutual aspirations of both countries.
  • UAE is lynch-pin of the economic, defence and strategic strands of the India’s coordinated strategy to outreach West Asia.
  • UAE is India’s third largest trading partner after China and the United States.
  • Bilateral trade between India and the UAE stood at about $50 billion in 2015-16.
  • UAE is among the top investors in India in terms of foreign direct investments (FDI) and was the fifth largest supplier of crude oil to India in 2015-16.
  • Besides, there are also more than 2.6 million Indians living in the UAE and their annual remittance is estimated to be around 14 billion dollars.
Recent Visits and Agreements:
  • Crown prince visited India
  • Signed nine agreements covering cooperation in the fields of currency swap, culture, investments in the infrastructure sector, renewable energy, space research, insurance supervision, cyber security, skill development and commercial information sharing.
  • However, the much anticipated agreement on India accessing UAE’s Sovereign Fund was not declared. India should carry out some structural changes in its economy to facilitate such an agreement, demanded by UAE
  • (MoU) between India and the UAE on Sovereign Wealth Funds (SWF) failed to materialise over concerns such as complex tax policies and “cumbersome” processes for doing business in India.
  • MoU to prevent Human Trafficking approved
  • India -UAE currency swap agreement approved
  • In recent Modi visit of UAE 5 MoUs were signed in key areas of energy sector, railways, manpower and financial services.
First Strategic Dialogue:
The first dialogue took place pursuant to the decision to elevate the relations to a Comprehensive Strategic Partnership following Prime Minister Narendra Modi’s visit to the UAE in August 2015 followed by crown prince Sheikh Mohammed bin Zayed Al Nahyan visit to India in February 2016. Outcomes are:
  • Two sides discussed several issues ranging from cooperation in the areas of trade and investments to expanding the bilateral cooperation to new areas under the strategic partnership.
  • The news areas include energy security, renewable energy, defence and security, electronics and information technology and space.
  • Both sides also finalised the Strategic Cooperation Agreement aimed at expanding bilateral cooperation to new key areas including energy, defence and security between both countries.
  • They also agreed on a number of new initiatives to further strengthen the bilateral cooperation and on signing of fresh instruments of cooperation.
The announcement of a strategic partnership between India and the United Arab Emirates is being seen as a significant elevation of ties as well as a sign of India’s shift in the region. How will India benefit from this shift? Critically analyse. (200 Words)
In recent past India has signed a number of strategic agreement with gulf countries like UAE and central asian countries. The importance of such strategic relationship should be understood from following perspective.
  1. Economic Partnership: UAE is third largest trading partner of India. These countries have high forex reserve which India can leverage for infrastructure investments and Make in India campaign. India is high dependent on these countries for its energy requirement. Thus a strong relationship is mandated for the energy security of the country.
  2. Military Cooperation: With the changes dynamics of gulf regions and central asian regions, India needs to re-evaluate its policy towards these countries. Though US is a strong power in the region, many countries want security partnership with India. Considering when Islamic state is growing fast and India faces the scar of terrorism. It will be in India’s favour to cooperate in counter-terrorism and exchanging information.
  3. Political Risk Management: This region is in turmoil politically. Growing Sunni Shias conflict, growth of ISIS, internal security threat etc. If this region become unstable India’s energy requirements will be at risk. Thus maintain a military relationship with a motive to secure balance of power will go a long way in ensuring India’s future.
  4. Other Areas of Importance: There are lot of Indian immigrants in gulf countries and they face many kind of hardship. It became important for India to their interest considering when we receive so much in form of remittance.
Moreover tourism, especially medical tourism holds lot of potential and also a opportunities to further develop the cultural and commercial ties.
Overall Gulf region and Central Asian region is important for India from strategic
point of view and unlike past we should maintain this relationship and present our self as a development-oriented country.
Write a critical note on India – UAE relations. (200 Words)
The UAE federation consists of 7 independent emirates. India-UAE relations can be analysed in terms of trade, investment, defence, energy security and expatriate Indians aspects
  1. Trade– India-UAE bilateral trade is 60 billion dollars making UAE India’s third largest trading partner. However India’s trade surplus with the UAE is negative due to crude oil imports. India needs to aggressively push its exports of gems, minerals and food items.
  2. Investment– UAE is currently the 10th largest investor in India. UAE has a sovereign wealth fund of 800 billion dollars. UAE’s investment in Indian infrastructure could be a game changer. The two countries have previously signed a Bilateral Investment Promotion and Protection Agreement (BIPPA) in 2013 to legally protect mutual investments.
  3. Defence-Indian and UAE despite signing a military agreement in 2011 have not found common ground in defence. Counter terrorism operations against the rising ISIS and maritime security operations especially in the Gulf of Aden must be prioritised.
  4. Energy security– The UAE meets 9% of India’s crude oil needs. India should increase crude oil imports from UAE to counter the ISIS’s control over Iraq.
  5. Expatriate population-2.5 million Indians live in UAE remitting 13 billion dollars annually. Many businesses set up by Indian expats are likely to invest in India. However India must seek better laws for humane treatment of Indian workers.
The PM’s visit to UAE will be the first by an Indian PM in 34 years. There is scope for cooperation in energy, trade, investment and security. India must be cautious while doing so since the US discourages Gulf countries from leaning towards any other nation

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