India-UAE Relations

UAE has a special place due to its business-friendly atmosphere, willingness to invest in the Indian economy and its important role in maintaining peace and stability in the region.

Significance

  • The UAE occupies a key place in India’s West Asia policy.
  • The high-level visit from both sides has given a new impetus to this partnership.
  • In 2017 the two sides signed the agreement on Comprehensive Strategic Partnership (CSP).

Economic Relations

  • Trade and commerce forms the backbone of the bilateral relations.
  • UAE has been one of India’s leading sources of FDIs.
  • UAE is India’s third largest trade partner after China and the United States.
  • The UAE accounts for eight per cent of India’s oil imports and was fifth largest supplier of crude oil to India.

Security and Defence Cooperation

  • Another significant pillar of India-UAE ties is reflected in their growing cooperation in security and defense sector.
  • With the spread of radicalism in Gulf and South Asia, India looks to enhance security cooperation with UAE to counter terrorist threats and combat radicalization.
  • ‘Desert Eagle II’, a ten day air combat exercise, was held between the air forces of India and UAE.

Recent Agreements

  • ONGC Videsh, Indian Oil Corp. Ltd (IOC) and a unit of Bharat Petro Resources Ltd (BPCL) paid $600 million for a 10% stake in the UAE’s offshore oil and gas field Zakum.
  • This is the first Indian Investment in upstream oil sector of UAE, transforming the traditional buyer-seller relationship.
  • Both sides signed a MoU that aims to institutionalise the collaborative administration of contractual employment of Indian workers in the Gulf country.
  • Under the MoU, both the sides will work for ending the existing malpractices, combat trafficking and organise collaborative programmes for education and awareness of contractual workers.

Concerns

  • As far as investments are concerned, slow implementation from Indian side is a major obstacle.
  • The bilateral trade has come down significantly in the past years.
  • It has been noticed that workers from other nationalities including Filipinos and Bangladeshis are replacing Indian workers.

Way Forward

  • India needs to ensure the execution of the investment projects with required expertise.
  • Potential areas to enhance bilateral trade include defense trade, food and agricultural products as well as automobiles.
  • Medical tourism can be an important area where India can attract Emiratis.
  • Indian companies with expertise in renewable energy sector can invest in UAE.

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