Vibrant Gujarat Summit Boosts Strategic Ties Between India, UAE

President Mohamed was a special invitee at the Vibrant Gujarat Global Summit 2024, held recently at Ahmedabad. The public roadshow also generated a huge turnout in honour of the two leaders. Three agreements were signed to increase cooperation in bilateral investment, renewable energy and healthcare.

India-UAE ties have been on a growth curve for quite some time and PM Modi and President Mohamed have been principally responsible for pushing the envelope. Ties have been transformed into a strategic partnership across a wide range of sectors.

Energy is a major sector wherein the UAE has stepped up to provide crude oil for India’s strategic reserves. A major refinery with an investment of US$ 44 billion has been planned with investment from Saudi Arabia’s Aramco and the UAE ADNOC oil company. A framework agreement was signed during the visit of the UAE foreign minister in 2018. Indian oil companies have acquired stakes in the oil fields in Abu Dhabi.

While the energy sector has been a traditional area of cooperation between oil producing UAE and other West Asian countries, the defence sector has witnessed joint naval exercises and discussion on joint defence production is on the anvil. Trade has grown manifold reaching US$ 100 billion and a currency swap agreement has been signed.

Cultural ties have grown with yoga celebrations in the UAE and many Indians choosing to live and run their companies from Dubai. Bollywood stars have invested in the housing sector in Dubai in large numbers. The UAE is now India’s third largest trading partner.

The large Indian community has made a seminal contribution to the economy of the UAE and this has been recognised by the UAE government. Cooperation in the digital sector has been enhanced to help Indians make financial transactions with ease. The UAE has also accommodated people of various religions and is the first country to allot land for the building of a huge Hindu temple. The culture of toleration is a unique feature of the UAE.

What’s Driving The Change

The main reasons for the sea change in bilateral ties between India and the UAE relate to several factors. Some of them are:

• Fundamental changes in the UAE economy, particularly the diversification from an oil and gas based economy. Today, bilateral cooperation extends to IT, space technology, tourism, defence manufacturing and renewable energy. Speedy implementation of high level decisions has spurred bilateral ties.
• Given India’s growing global profile, engaging India for economic reasons has gathered momentum. Investment opportunities in India have attracted attention and a US$ 75-billion fund, with a component of the UAE’s Sovereign Fund, for investment in India has been announced. India is the third-largest importer of oil and a stable market for the UAE’s exports. These complementarities are natural factors for closer engagement.
• Geopolitically, India is seen as a proponent of multilateralism and a multipolar global order, goals shared by the UAE. India’s consistent and fundamental foreign policy principle of non-interference in any country’s domestic affairs, taking sides in regional disputes and a promoter of the interests of the Global South has made India a reliable partner.
• Moreover, the changing regional scenario has changed and the old mindsets built on ideological inhibitions have been set aside. The feeling that overwhelming dependence on the USA was no longer viable and new partnerships with big powers had become inevitable.
• With the rise of terrorism and the emergence of ISIS, India-UAE cooperation has intensified. Both countries face terrorist threats by non-state actors. The old perception of the UAE as a haven for Indian criminal gang leaders and other law-breakers has long been dispelled by close cooperation in intelligence sharing. The UAE’s cooperation in deporting such law-breakers for trial in India has been greatly appreciated.
• The shared perception that security in the maritime zone, comprising the Gulf and the Arabian Sea, and the larger Indian Ocean Region [IOR] are linked and has spurred defence cooperation. Piracy in the Arabian Sea and the Indian Navy’s role in curbing it has been a shared objective.
• The Indian diaspora of around 3.5 million is the largest in the world. Aviation connectivity between India and the UAE exceeds 1,076 flights a week. Business visitors and tourists are increasing rapidly. The UAE has eased its visa system considerably. For instance, Indians holding US visas, Green Cards, UK or EU visas or residency now get visas on arrival in the UAE. India’s e-visa scheme for Emiratis and others since 2015, provides visa-on-arrival for UAE nationals at 16 airports across India. Visa-free entry into India for UAE nationals is under consideration.

Though India-UAE diplomatic ties were established as far back as 1972, relations were stable and grew gradually and somewhat passively. When PM Modi visited the UAE in 2015, it was an Indian PM visiting the UAE after 34 years. The last visit by an Indian PM was in 1981. High level visits thereafter have been frequent and bilateral interaction has intensified manifold.

PM Modi’s foreign policy initiatives have been largely responsible for many significant changes in India’s ties with many countries. The UAE has become a favoured country for India’s Extended Neighbourhood Policy.

Convergence Of Interests

The converging geopolitical and geoeconomic vision of the two leaders, PM Modi and President Mohamed, has been the driving force behind propelling bilateral ties to new heights.

The former’s visit in 2015, for instance, resulted in a slew of agreements encompassing economic, defence and law enforcement cooperation sectors. Ties were reinforced when then Crown Prince Mohamed was invited as chief guest for the 68th Republic Day celebrations in 2017. A joint statement on the Comprehensive Strategic Partnership Agreement was issued.

In 2022, the UAE and India signed the landmark Comprehensive Economic Partnership Agreement (CEPA). PM Modi has visited the UAE five times in the last eight years.

The UAE’s 2010 ‘Vision 2021’ document had identified six priority areas – a cohesive society, building a distinct identity, public safety, sustainable environment and infrastructure, backed by a world class healthcare and education system to turn the country into a competitive knowledge economy, to promote peace, security and prosperity with dignity.

The ‘Economic Vision 2030’ document focussed on a long-term diversification strategy by building a skilled workforce, enabling a globally integrated business environment and top class infrastructure. To build a knowledge economy, the UAE has expanded its “golden visa” residency permits for 10 years to attract doctors, engineers, PhD scholars and specialists in high-end technology fields such as artificial intelligence (AI), big data, virology and epidemiology.

The UAE’s investment into India has reached US$ 9 billion, making the country the 10th largest foreign investor in India. The India-UAE Business Council created in 2015 pushed for greater synergy, boosting economic cooperation.

In 2019, a fast-track single window was created for investment from the UAE. The signing of the Abraham Accords had signalled normalisation of ties with Israel and the I2U2 [India, Israel, UAE and US] agreement had increased scope for collaboration and cooperation in all sectors. India’s presidency of the G20 Summit and the UAE’s COP28 meeting have added synergy to bilateral ties.

Unfortunately, the Israel-Hamas conflict and the attacks on international shipping along the Red Sea coast and the Bab-El-Mandeb by the Houthis in Yemen, have caused great turbulence in the region, with fears of a wider conflict breaking out casting a shadow on the region.

Oil prices have risen, transportation costs have gone up as shipping companies reroute their ships via the Cape of Good Hope. Global concern has risen over the widening conflict and a quick end to the conflict is imperative for regional and international peace, apart from economic recovery and stability.

(The author, a former Secretary in the Ministry of External Affairs, has served in three West Asian countries - Egypt, Saudi Arabia and Israel. He is a Visiting Fellow at the Observer Research Foundation and the founding Director of DeepStrat, a think tank. Views expressed are personal)