UAE-India: Towards greater strategic partnership
The article has been authored by Rajeev Agarwal, assistant director at Manohar Parrikar Institute for Defence Studies and Analyses, New Delhi.
The baton of leadership has officially been passed on in the United Arab Emirates (UAE) with the demise of the UAE president and ruler of Abu Dhabi, Sheikh Khalifa bin Zayed Al Nahyan, on May 13,2022. He has been succeeded by his half-brother, Sheikh Mohamed bin Zayed Al Nahyan (MBZ), who has been the de-facto ruler of the country since 2014 as Sheikh Khalifa had been ill. Within a day of the demise of Sheikh Khalifa, members of the Federal Supreme Council, made up of rulers of the UAE's seven emirates unanimously elected MBZ as the president, setting stage for a new era in the growth of UAE.
The election of MBZ as the president was largely expected and he has set the ball rolling straight away, calling for a renewed focus towards UAE’s all-round growth and for developing a well-diversified economy which is independent of oil revenues in the future. He has endorsed the UAE Centennial Plan 2071 which was launched last year. The Centennial Plan that extends over five decades and aims to lay down a clear roadmap for the nation to follow to enhance country’s reputation and its supremacy as a responsible and soft power. It intends to arm the youth of the country with the skills and knowledge needed to succeed and fulfil the country’s goal of becoming the best country in the world by 2071. The plan is based on four pillars: A future-focused government, excellent education, a diversified knowledge economy, and a happy and cohesive society. This vision coincides very closely with the Vision 2047 of India, which too has set high and ambitious goals for India to achieve in its quest to become a modern and prosperous nation by its centenary of independence in 2047and cement its place as a vishwa guru (global leader).
India and UAE share a very close relationship, built on a strong foundation of brotherhood, trade, energy security, security and people to people ties. The bonds of friendships grew stronger after elevation of MBZ as the de-facto ruler and election of Narendra Modi as India’s Prime Minister (PM), both which coincidently happened in 2014. Both leaders share a deep and common understanding of issues in the region, role that the two countries can play and most importantly, the scope and importance of bilateral ties.
The tone to the revitalised relationship was set by the historic visit of PM Modi to the UAE in August 2015, first visit by Indian PM after a gap of over 34 years, where the two leaders agreed to elevate the relationship to a comprehensive strategic partnership through strengthening of cooperation in all areas, including fields like counter-terrorism, joint defence production, and space cooperation. UAE reciprocated and Crown Prince MBZ visited India during February, 2016 and then again during January, 2017 as chief guest at the Republic Day celebrations. PM Modi revisited the UAE in February, 2018 for the World Government Summit where India was the guest of honour. In April 2019, the UAE President conferred on PM Modi the Order of Zayed, the highest decoration awarded to heads of foreign governments.
On the trade front, UAE is India’s third largest trade partner with a current estimated trade of $ 60 billion. The UAE’s investment in India is pegged at around $ 12 billion, which makes it the ninth biggest investor in India and it is growing by the day. ADIA, the investment authority of UAE has made major investments in India. In July 2017, it approved an investment of $ one billion in India’s sovereign investment fund called National Investment and Infrastructure Fund or NIIF. ADIA has already invested $400 million in housing and is likely to invest another $500 million. It has also invested $500 million in the renewable energy. In addition, Dubai-based DP World has signed a MoU with NIIF to invest up to US$ one billion in ports logistics and river transport infrastructure. There have been investments in private entities too. In June 2020, Abu Dhabi-based sovereign investor Mubadala Investment Company announced its decision to invest $ 1.2 billon for a 1.85% equity stake in Reliance Jio. It was soon followed by ADIA too announcing its intention to invest $ 750 million in Reliance Jio. Most recently, in March, a large trade delegation from UAE visited Jammu & Kashmir, to seek trade and investment opportunities in the state.
Energy security is another important pillar of strong bilateral ties. UAE is the third largest exporter of oil to India after Saudi Arabia and Iraq. It has assured India of steady supply of oil. As an assurance towards it, an agreement was concluded during PM’s visit to UAE in February 2018 between Indian Strategic Petroleum Reserves Ltd (ISPRL) and ADNOC of UAE to operationalise the filling up of a strategic petroleum reserve cavern to ensure even supply and pricing of oil, with an investment of $ 400 million by ADNOC through storing crude oil in the ISPRL underground rock caverns.
The most recent example of exceptionally close cooperation between the two nations was witnessed when they concluded the talks over free trade agreement in a record 88 days and signed the landmark Comprehensive Economic Partnership Agreement (CEPA) on February 18, 2022 which is a precursor to futuristic cooperation between the two nations economically and a major boost to bilateral relations. One of the key agenda of CEPA is to intensify bilateral trade to $115 billion in the next five years. The CEPA came into effect on May 1 and promises to radically change the nature of trade between the two countries.
The ties between the two countries are deeper and stronger than ever. The bond between Modi and MBZ just adds flavour to the ties. Both have gone beyond their way to make exceptional and special arrangements for the other. The list of exceptions is endless but some do stand out. When UAE hosted the OIC Summit in 2019, it invited India's then External Affairs Minister Sushma Swaraj despite protests from some nations including Pakistan. PM Modi was the keynote speaker at the World Government Summit in February, 2018. India was the guest of honour at the UAE's prestigious annual cultural festival in March 2018, the Abu Dhabi Festival (ADF). The laying of foundation stone for a temple on Abu Dhabi in April 2019 on a large tract of land gifted by MBZ is yet another example of how special the bilateral ties are. The RuPay card was officially launched in the UAE on August 24, 2019 at the Emirates Palace, Abu Dhabi, making UAE one of the few countries in the world to have such an arrangement with India. International Yoga day has been celebrated annually in UAE since 2016. As a part of the joint vision statement signed on 18th February, India is set to open its first offshore campus of the Indian Institute of Technology. There is also a likelihood of Indian Institute of Management too opening its offshore campus in UAE in near future.
UAE and India also share common and shared concerns on issues of regional as well as international peace and security. In the ongoing war in Ukraine too, both have repeatedly abstained at voting against Russia at the UN, signalling common understanding and approach. There is a consensus between both nations that the security of the Gulf and the Indian Ocean are complementary and deserve a holistic approach. On countering terror, UAE has always stood by India, whether it was Uri, Pathankote or Pulwama. Both leaderships also appreciate the dangers and threats posed by violent non-state extremists.
With MBZ firmly in the saddle and Modi well placed to continue to lead India on its path of growth and prosperity, the limits of friendship between the two nations is boundless. As both countries look towards their respective centenaries, it looks clear that the golden era of UAE-India bilateral relationship is just about to gain momentum.
(The article has been authored by Rajeev Agarwal, assistant director at Manohar Parrikar Institute for Defence Studies and Analyses, New Delhi.)