India-UAE Relations

There are strong ties between India and the United Arab Emirates (UAE) based on millennia of cultural, religious, and economic exchange. There have been centuries of people-to-people and barter trade between the two regions. India-UAE relations were bolstered with diplomatic ties between India and the United Arab Emirates (UAE) established in 1972. The UAE established an embassy in Delhi in 1972, and India established an embassy in Abu Dhabi in 1973.

About United Arab Emirates (UAE) 

For India-UAE relations , it is important to know a little about the UAE. UAE or the United Arab Emirates is situated in the West Asian parts and also surrounded by the land boundaries of Oman and Saudi Arabia. The Persian Gulf, along with the Strait of Hormuz, is also surrounding the UAE. Further, 7 territorial Emirates, including Dubai, Sharjah, Ras-Al-Khaimah, and Umm Al-Quwain, are present.

Revenues from oil and natural gas, particularly in Abu Dhabi, are critical to the United Arab Emirates’ economic well being. Economic diversification has occurred recently, particularly in Dubai. The emirates of the United Arab Emirates, including Abu Dhabi, have remained cautious in their diversification efforts.

The government’s investment in the services that citizens see and use on a daily basis obviously has something to do with the UAE’s high survival rate. People in the United Arab Emirates are far more satisfied with the country’s transportation infrastructure currently than they were in the past.

Pillars of Cooperation

The pillars of cooperation underlying the  India-UAE relations are mentioned below.

Economic Cooperation

• The United Arab Emirates is India’s number three trading partner and its number two export destination after the United States
• India ranks as the UAE’s second-largest commercial partner
• Trade between the two countries totaled US$ 59.10 Billion in 2019-2020
• The non-oil trade amounted to around US$ 41.43 billion of this total Approximately US$ 30 billion worth of goods and services were imported by India along with export of US$ 28.8 billion goods and services

Energy Cooperation

• One of the main cornerstones of collaboration between the two countries is energy cooperation
• India’s fourth-largest crude oil supplier is now the United Arab Emirates. It provided India with 17.49 million metric tonnes of crude oil
• For the years 2019-2020, the two countries’ crude oil trade is expected to total around US$ 18 billion
• This type of cooperation has evolved from a buyer-seller connection to one that involves a “Strategic Partnership,” which is a key aspect
• Oil and gas investments in India are expected to total over US$ 300 billion, as the country has risen to the position of third-largest consumer of energy goods
• An agreement to store strategic crude oil at Padur and Mangalore, Karnataka has been reached between the United Arab Emirates and the state

Defence/Strategic Cooperation

• The security collaboration has expanded in recent years
• India has already observed UAE territory being utilised for different anti-Indian activities because of the UAE’s popularity as a destination for Pakistani diaspora
• Since the signing of the MoU on Defence Cooperation in 2003 and the establishment of the Joint Defence Cooperation Committee (JDCC), the two countries have engaged in regular interaction
• The United Arab Emirates and Israel have just agreed to normalise their relations
• There are several potential for India to work with Israel and the United Arab Emirates through Joint Task Force in sectors such as water preservation technologies, agriculture, military defence and more, not just in India but also in South Asia, Africa and other locations

Diaspora

• An estimated 3.3 million Indians live abroad and send back over $17.56 billion in remittances each year
• For Indian nationals from all around the country, the United Arab Emirates remains a popular choice for travel
• The United Arab Emirates has the biggest concentration of residents from Kerala

India-UAE Trade Relations: Recent Development

Both countries are now in the process of signing a Comprehensive Economic Partnership Agreement (CEPA) that intends to increase India-UAE bilateral trade and investment. Following are the key features of the agreement –

• This strategic economic agreement between the two countries is projected to expand bilateral trade in goods to $100 billion and services to $15 billion within five years of signing
• Both sides will focus on immediate items of importance
• Products of interest in India include textiles and handicrafts
• Finance, food, medical equipment and byproducts will be areas of focus for the UAE

Challenges

The basic challenges faced in  India-UAE relations have been indicated below.

• Commercial Challenges

Indian companies based in the UAE face challenges due to unclear commercial regulations, labour laws, and a lack of transparency by Emirati businesses.

• Iran Issue

The UAE and Iran have territorial disputes over the Tunbs and Abu Musa islands. Iran is aggressive in its interactions. It will be another Iranian-Arab feud. India’s energy security, trade and diaspora ties will be harmed if there is a regional conflict.

• Problems faced by Diaspora

A large number of untalented and unskilled Indian labourers or migrants working in the United Arab Emirates are subjected to terrible working conditions and are denied the protections afforded to other workers.

Conclusion

The United Arab Emirates will play a vital part in this process as India’s expertise grows around the world and the country emerges as an emerging force. Indian participation in the United Nations Security Council (UNSC) as a non-permanent member will give India a greater opportunity to cooperate with its ally across the Arabian Sea.

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