Context: The United Arab Emirates (UAE) Deputy Prime Minister and Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan was on a three-day visit to India from 11-13 December 2024. Sheikh Abdullah bin Zayed Al Nahyan was in India to attend the 15th India-UAE Joint Commission Meeting and the Fourth UAE-India Strategic Dialogue.
Jaishankar has called the Joint Commission Meeting an important mechanism for two nations to discuss the entire gamut of growing bilateral ties.
Relevance: Mains: India and its neighborhood relations.
Importance of UAE:
- UAE is among the top sources of investments for India. There has also been growing Indian investments into the UAE leveraging its strategic location as a trade hub for the Middle East, Europe and Africa.
- Energy cooperation has over the period consolidated with several long-term oil and gas contracts signed recently.
- India and UAE have common interest in preserving and promoting the stability, security and prosperity of our regions.
Key Takeaways from the Visit:
- The two sides held discussions to expand our strategic partnership in several areas, including defence, emerging technologies, nuclear energy, polar research, critical minerals and renewable energy, among others.
- The ministers welcomed the signing and entry into force of the India-UAE Bilateral Investment Treaty. They reaffirmed the strong trade relationship between the UAE and India, further enhanced by the India-UAE Comprehensive Economic Partnership Agreement (CEPA).
- They commended the strong cooperation between the two Central Banks, particularly in the fintech sector, and the development of public digital infrastructure, including Central Bank Digital Currencies (CBDC), instant payments, and card schemes.
- Both sides also discussed the India-Middle East-Europe Economic Corridor (IMEEC), a major initiative aimed at improving maritime connectivity and trade between India, the UAE, and Europe.
India-UAE bilateral relationship:
- Diplomatic Relations: India and the UAE established diplomatic relations in 1972, with the UAE opening its embassy in India that same year, followed by India's embassy in the UAE in 1973.
- High-Level Visits: The relationship gained momentum with Prime Minister Modi's visit in 2015, marking a new strategic partnership. Since then, Modi has visited the UAE multiple times, with his latest visit in November-December 2023 for COP28. UAE President Sheikh Mohamed bin Zayed has also made several visits to India, including attending the G20 Summit in September 2023 and the Vibrant Gujarat Global Summit in January 2024.
- Multilateral Cooperation: Both nations cooperate at platforms like the UN, BRICS, I2U2 (India-Israel-UAE-USA), and the UAE-France-India (UFI) Trilateral. UAE was a guest country at the G20 Summit hosted by India.
- Economic Relations: Trade between India and the UAE has evolved from traditional goods to a diverse range of products. In 2022-23, trade reached $85 billion, making the UAE India's third-largest trading partner. UAE is also India's second-largest export destination.
- Investment: The UAE's estimated investment in India is around $20-21 billion, with $15.5 billion as FDI. The UAE has committed to invest $75 billion in Indian infrastructure. Notable investments include $1 billion in India's National Infrastructure Investment Fund.
- Trade Agreements: A significant MoU was signed for a Local Currency Settlement System (2023) to facilitate transactions using Indian Rupees and UAE Dirhams.
- Air Connectivity: Strong air connectivity exists between both countries, enhanced by an air-bubble agreement during the COVID-19 pandemic.
- NRI Remittances: The Indian community in the UAE (around 3.5 million) contributes significantly to remittances, accounting for 18% of total remittances to India.
- Cultural Relations: Indian culture is prominent in the UAE, with Indian cinema and festivals celebrated widely. Initiatives like yoga events and cultural exchanges have further strengthened ties.
- Education Initiatives: Over 100 Indian schools operate in the UAE. An IIT Delhi campus in Abu Dhabi has also become operational.
- Indian Community: The Indian diaspora is the largest ethnic group in the UAE, constituting about 35% of the population. The community has transitioned from predominantly blue-collar workers to a mix of professionals and businesspeople.
- Recognition of Contributions: Several Indians have received prestigious awards for their contributions to society and culture in the UAE.
- Construction of BAPS Mandir: A BAPS Mandir is under construction near Abu Dhabi, expected to be inaugurated in February 2024, enhancing cultural ties between India and the UAE.
Key features of India-UAE Comprehensive and Strategic Partnership:
- There has been a tremendous growth in bilateral relations since the elevation of bilateral ties to a comprehensive strategic partnership in 2017.
Its key features are the following:
- Model Relationship: India's External Affairs Minister S. Jaishankar described the India-UAE Comprehensive Strategic Partnership as a "model relationship," emphasizing its strength and diversification since the Comprehensive Economic Partnership Agreement (CEPA) came into effect in May 2022, leading to a trade volume of $85 billion.
- Energy Cooperation: The partnership focuses heavily on energy collaboration, including long-term supply agreements, investments in strategic reserves, and exploration of renewables like green hydrogen and nuclear energy. Recent agreements in oil and gas have solidified this cooperation.
- Defence and Security: There is a growing emphasis on defence collaboration, highlighted by joint military exercises such as Desert Cyclone and the establishment of a Defence Partnership Forum. Both nations aim to enhance regional security through military cooperation and joint training initiatives.
- Economic Growth: The CEPA aims to boost bilateral trade to $100 billion within five years, covering various sectors including services, agriculture, and technology. Initiatives like Bharat Mart and MAITRI are designed to facilitate trade and regulatory processes.
- Infrastructure development: The partnership includes significant investments in infrastructure projects, with a focus on establishing dedicated investment zones for UAE companies in India, enhancing food security, and improving logistical services between the two countries.
- Cultural and educational Ties: The partnership also aims to strengthen cultural ties through educational initiatives, including the establishment of an Indian Institute of Technology (IIT) in the UAE to foster innovation and technological progress.
- Regional stability: Both countries share common interests in promoting stability and security in the West Asia region, collaborating on counter-terrorism efforts and maritime security initiatives.
- Future prospects: The roadmap for the partnership emphasizes addressing global challenges together while exploring new areas of cooperation such as climate action, digitalization, and healthcare.
Way Forward: Issues like reforming the Kafala system for welfare of migrants, addressing the spillover of the recent Syrian crisis in the region, Chinese influence and minimization of non-trade barriers need to be addressed to further deepen the relationship.