Indian PM’s UAE visit may give fresh impetus to bilateral trade
The UAE will receive the Indian prime minister today, who is embarking on a two-day visit to the Arab country. Many believe this, which is the first such trip by a premier of the world’s second most populous nation to its third largest trading partner in 34 years, will be a major step in the trade relations of the both countries.
India-UAE trade was valued at $180 million when the PM Indira Gandhi came to the UAE in 1981. It has since swelled enormously to nearly $60 billion now, with India being the second largest trading partner of the UAE for the year 2014. Just the non-oil trade reached more than $28bn.
On the other hand, the UAE was India’s third-largest trading partner for the year 2014-15, after China and the US.
India and the UAE share a long history of political, economical and defence relations. Interestingly, for more than a couple of centuries, the UAE used the currency of the South Asian nation.
With a headcount of more than 2.6m, Indians constitute a whopping 30 per cent of the UAE’s population and their annual remittance, which is estimated to be nearly $14bn, is 20 per cent of India’s total remittances.
Indian Prime Minister Narendra Modi’s visit is expected to give a boost to the trade and investment cooperation agreements between the two countries. The PM will be seeking investments from the world’s second largest sovereign wealth fund (The Abu Dhabi Investment Authority’s $773bn in assets is second only to Norway’s Government Pension Fund-Global) in the vital sectors of the country’s economy.
The visit is also significant as bilateral trade fell by $16bn during the past two years, a drop from its peak level of $75.45bn in 2012-13 to $59.04bn in 2014-15.
Ahead of his visit, the PM spoke highly of the ties between the two countries in a Facebook post and said the UAE “is a global economic success story that has attracted people from all over the world”. He added that it has “emerged as an important logistics hub.”
“During my visit, I seek to enhance cooperation in energy [and] trade, and will talk to investors on why India is an attractive destination to invest,” wrote the PM.
Meanwhile, the state-run news agency WAM said in a report that the UAE’s foreign minister, HH Sheikh Abdullah bin Zayed Al Nahyan, lauded the Indian PM’s visit, saying that the UAE and India have a robust economic relationship, which is underpinned and sustained by various bilateral agreements that have been signed over the years.
“The prime minister’s visit is of strategic significance in our bilateral relations and follows on the heels of growing diplomatic, economic, energy and defence cooperation between our two countries,” he said.
During the visit to the UAE, the sixth largest source of oil import to India, the Prime Minister is scheduled to meet HH Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, and His Highness Sheikh Mohammed bin Rashid Al Maktoum, the Vice President and Prime Minister of UAE and Ruler of Dubai.
During his stay, the Indian premier will also meet the Indian billionaire businessmen in order to market India as an attractive business destination.
The major companies in the UAE have large investment in India, with the UAE being the tenth-biggest source of foreign direct investment. Emaar, DP World, Abu Dhabi’s National Petroleum Construction Company, Abu Dhabi National Energy Company, Abu Dhabi Investment Authority, among others, have operations in the country.
However, it is widely known that some of them had tough times operating in the country.
Recently, an Indian newspaper, The Economic Times, had reported that Dubai’s Emaar Properties was close to ending its decade-old joint venture with Indian firm MGF Developments.
The real estate giant entered India through the joint venture in 2005 at the peak of the real estate market. It invested approximately $1bn in equity and another $400-500 million in the form of debt, convertible instruments and guarantees.
However, the company refuted paper’s claims, saying it was committed to the success of its projects in India.
The PM’s visit will be an opportunity for India to increase the investor confidence and to enhance the bilateral ties.
“Prime Minister Narendra Modi’s visit to the UAE provides an opportunity to chart a new course in our partnership for the 21st century. We look forward to a productive exchange of ideas covering a wide range of economic, political and security issues of mutual interest,” said Sheikh Abdullah.
(This story first appeared on www.ame-info.com, a TRENDS sister website)