India UAE (United Arab Emirates) Relations -UPSC IAS Exam- by Dr Ashok...

India UAE (United Arab Emirates) Relations -UPSC IAS Exam- by Dr Ashok Dhamija

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Detailed discussion of the India-UAE (United Arab Emirates) Relations (also freely subscribe to our YouTube Education channel with about 100 free videos on UPSC IAS and other competitive examinations):

About UAE

  • UAE or United Arab Emirates, sometimes simply called the Emirates, is a federal absolute monarchy in Western Asia.
  • UAE is a federation of seven emirates, and was established on 2 December, 1971. The constituent emirates are:
    • Abu Dhabi (which serves as the capital),
    • Ajman,
    • Dubai,
    • Fujairah,
    • Ras al-Khaimah,
    • Sharjah and
    • Umm al-Quwain.
  • Each emirate is governed by an absolute monarch.
  • Together, they jointly form the Federal Supreme Council.
  • One of the monarchs is selected as the President of the United Arab Emirates.
  • Islam is the official religion of the UAE and Arabic is the official language.
  • In 2013, the UAE’s population was 9.2 million, of which 1.4 million are Emirati citizens and 7.8 million are expatriates.
  • The UAE’s oil reserves are the 7th largest in the world.
  • Its natural gas reserves are the world’s 17th largest.
  • UAE’s most populous city of Dubai is an important global city and an international aviation hub.
  • UAE remains reliant mainly on its export of petroleum & natural gas.
  • UAE is a federation of hereditary absolute monarchies. It is governed by a Federal Supreme Council made up of the seven emirs. All responsibilities not granted to the national government are reserved to the emirates.
  • A percentage of revenues from each emirate is allocated to the UAE’s central budget.
  • Although elected by the Supreme Council, the presidency and prime ministership are essentially hereditary:
    • The emir of Abu Dhabi holds the presidency, and
    • the emir of Dubai is prime minister.
  • Sheikh Khalifa bin Zayed Al Nahyan is the present President (emir of Abu Dhabi). [Abu Dhabi’s crown prince, Mohammed bin Zayed Al Nahyan, is the heir apparent.]
  • Mohammed bin Rashid Al Maktoum is the present Prime Minister of the UAE (emir or ruler of Dubai).
  • UAE has the second largest economy in the Gulf Cooperation Council (GCC), after Saudi Arabia, with a gross domestic product (GDP) of $377 billion in 2012.
  • UAE’s criminal and civil courts apply elements of Sharia law, codified into its criminal code and family law.
  • Flogging and stoning are legal punishments in UAE.
  • Dubai International Airport was the busiest airport in the world by international passenger traffic in 2014, overtaking London Heathrow.

Factors leading to better India-UAE relations

  • India seeks to enhance economic engagement and deepen security cooperation with the Gulf.
  • UAE’s “Look East” policy to find partners for its economic growth as it deals with security concerns emanating from turmoil in West Asia and growing threat from terrorism and extremism. UAE finds a natural partner in India.
  • Rise of radical and extremist forces, changes in the regional order in West Asia.
  • Uncertainties over US policy under President Donald Trump.
  • India’s growing interest in the Gulf region, driven by its economic and trade ties.
  • India’s energy stakes in Gulf region.
  • Presence of about 70 lakh Indians in the Gulf, including about 26 lakh Indians in UAE.
  • UAE has:
    • a business-friendly atmosphere,
    • shows willingness to invest in the Indian economy,
    • stable regime in an unstable region,
    • has important role in maintaining peace and stability in the region,
    • traditional cultural ties with India.

India – UAE Relations

  • India and UAE enjoy strong bonds of friendship based on age-old cultural, religious and economic ties between the two nations.
  • Recent high-level visits have further strengthened the ties between the two countries immensely:
  • Landmark visit of Prime Minister Narendra Modi in August 2015 to UAE.
  • Return visit of Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of UAE Armed Forces, to India in February, 2016.
  • The visit of Crown Prince Sheikh Mohammed bin Zayed Al Nahyan to India as chief guest for Republic Day, 2017.

Commercial Relations

  • Trade and commerce form the backbone of the bilateral relations.
  • India-UAE trade, valued at US$ 180 million per annum in the 1970s, is today around US$50 billion.
  • UAE is India’s third largest trading partner for the year 2015-16 after China and US.
  • UAE is the second largest export destination of India with an amount of over US$ 30 billion for the year 2015-16.
  • For UAE, India is the largest trading partner for the year 2015 with an amount of over US$ 28 billion (non-oil trade).
  • UAE is the only country in the Gulf with which India has a favourable trade balance despite it being a substantial source of crude oil for India.
  • India’s major export items to the UAE are: Petroleum Products, Precious Metals, Stones, Gems & Jewellery, Minerals, Food Items (Cereals, Sugar, Fruits & Vegetables, Tea, Meat, and Seafood), Textiles (Garments, Apparel, Synthetic fibre, Cotton, Yarn) and Engineering & Machinery Products and Chemicals.
  • India’s major import items from the UAE are: Petroleum and Petroleum Products, Precious Metals, Stones, Gems & Jewellery, Minerals, Chemicals, Wood & Wood Products.
  • There are 900 direct flights per week between various destinations of India and the UAE.
  • UAE is the 10th biggest investor in India in terms of FDI.
  • There is an estimated US$ 8 billion UAE investment in India of which around US$ 4 billion (March 2016) is in the form of foreign direct investment (FDI), while the remaining is portfolio investment.
  • Several prominent private and public sector Indian companies and banks are also operating in the UAE.
  • Indian businesses have established a strong footprint in the UAE.
  • For example, the Jebel Ali Free Zone (JAFZA) is home to more than 800 leading Indian companies and Dubai and Abu Dhabi are home to a significant Indian business presence.
  • Major Indian companies such as L&T, ESSAR, Dodsal, Punj Lloyd, Engineers India Ltd., TCIL etc. have been able to obtain significant number of contracts in UAE.
  • UAE has agreed to establish UAE-India Infrastructure Investment Fund, with the aim of reaching a target of US$ 75 billion to support investment in India’s plans for rapid expansion of next generation infrastructure, especially in railways, ports, roads, airports and industrial corridors and parks.

Energy sector Relations

  • UAE is the 5th largest supplier of crude oil to India.
  • The UAE accounts for 8% of India’s oil imports.
  • There is significant mutual synergy in utilizing various possibilities offered in energy cooperation.
  • India-UAE energy ties are likely to see further momentum.
  • In 2016-17, India plans to import 2.5 million tons more than what it purchased (16.11 million tons) in 2016.
  • The Abu Dhabi National Oil Company (ADNOC), in a first of its kind deal, has agreed to store crude oil in India’s maiden strategic storage facility and give two-thirds of the oil for free to India.

Indian community in UAE

  • UAE is home to more than 26 lakh Indians.
  • This is the largest expatriate community in the UAE.
  • Professionally qualified personnel constitute about 15% of the community, followed by 20% white-collar non-professionals (clerical staff, shop assistants, sales men, accountants, etc.) and the remainder 65% comprises blue-collar workers.
  • The Indian community has played a major role in the economic development of the UAE.
  • The annual remittances made by the large Indian community in UAE amount to over US$15 billion (2013).
  • With a large number of blue-collared Indian workers, focus of bilateral relations is also on developing efficient grievance-redressal mechanisms for the Indian workers in the UAE.

Security and Defence Partnership

  • There is growing cooperation between India and UAE in security and defence sector.
  • Given the current state of flux in West Asia, India sees the UAE as an important partner to maintain peace and stability in the region.
  • With the rise of global terrorist organizations and spread of radicalism in Gulf and South Asia, India looks to enhance security cooperation with the Gulf countries including the UAE to counter terrorist threats and combat online radicalization.
  • Similarly, UAE and India are looking to enhance defence cooperation to ensure peaceful maritime trade, prevent organized crime and deny opportunities for global terrorist organizations to set up their networks in South Asia and the Gulf.
  • In February 2016, agreements were signed to boost cooperation in defence and security through joint defence training and exercises.
  • ‘Desert Eagle II’, a ten day air combat exercise, was held in May-June 2016 between the air forces of India and UAE.
  • Discussions are going on to explore opportunities for joint production of defence equipment in India and the selling of Indian military equipment to the UAE.
  • A unit from the UAE Armed Forces marched side by side with its Indian counterparts during Republic Day 2017 parade in New Delhi.
  • In January, 2017, India approved the MOU on maritime education and training, which will help in recognition of maritime education and training, certificates and competency, endorsements, training documentary evidence and medical fitness certificates for seafarers and cooperation.
  • UAE has been supportive of India after the Pathankot and Uri terror attacks.
  • The assassination of 5 UAE diplomats in Kandahar on January 10, 2017 has raised serious concerns in UAE regarding the terror attack on their citizens in Afghanistan.
  • The India-UAE joint statement issued in January 2017 notes the need “to provide further impetus to these relations, including through joint exercises, training of naval, air and land forces, as also in the area of coastal defence and through participation in defence exhibitions etc.”
  • One of the 104 satellites launched by ISRO on 15 Feb 2017 was from UAE.

Recent developments…

  • In January 2017, the two sides signed the agreement on Comprehensive Strategic Partnership (CSP).
  • During the February 2016 visit of the Crown Prince, MoUs / agreements were signed pertaining to:
    • facilitation of Institutional Investors in infrastructure,
    • cooperation in Renewable energy,
    • cooperation in combating Cyber-crimes,
    • Cultural exchange,
    • Space,
    • Skill Development,
    • Insurance, and
    • Currency swaps.

Key commitments in Joint Statement issued during PM’s visit in August 2015

  • Coordinate efforts to counter radicalization and misuse of religion by groups and countries.
  • Denounce and oppose terrorism in all its forms and manifestations.
  • Promote cooperation in cyber security.
  • Establish a dialogue between the national Security Advisors and the national Security councils.
  • Cooperate in maritime security and strengthen defence relations
  • Establish a strategic security dialogue
  • Further promote trade between the two countries, with the target of increasing trade by 60% in the next five years.
  • Establishment of UAE-India Infrastructure Investment Fund, with the aim of reaching a target of USD 75 billion to support investment in India’s infrastructure.
  • Promote strategic partnership in the energy sector, including through UAE’s participation in India in the development of strategic petroleum reserves, upstream and downstream petroleum sectors, and collaboration in third countries.
  • Promote cooperation in Space, including in joint development and launch of satellites, ground-based infrastructure and space application.
  • Cooperate in peaceful uses of nuclear energy including in areas like safety, health, agriculture and science and technology.
  • Cooperate in manufacture of defence equipment in India.

 

India- UAE Joint Statement during the State Visit of Crown Prince of Abu Dhabi on February 12, 2016

  • India and UAE look forward to the early signing of the Comprehensive Strategic Partnership Agreement.
  • They reaffirmed their resolve to work together to substantially increase trade by 60 percent over the next five years.
  • UAE is invited to be a partner in India’s growth story, and to participate in projects creating mega industrial manufacturing corridors, including the Delhi-Mumbai Industrial Corridor as well as the Digital India and Start up India programs.
  • UAE noted its interest in investing in infrastructure development in India, especially in priority areas such as railways, roads, ports, and shipping. They reiterated USD 75 billion target for UAE investments in India‟s infrastructure development plans.
  • The two sides agreed to further business-to-business cooperation in Information Technology (IT), Information Technology Enabled Services (ITES), and Electronics System Design and Manufacturing (ESDM). Both sides agreed to cooperate for investment opportunities in the health care industry, including in pharmaceuticals and biotechnology sectors and resolved to urge its private sector to explore early participation in these sectors.
  • The two sides agreed to enhance cooperation in space science and space technology.
  • The two sides agreed to cooperate in establishing joint investment projects in the UAE and India, as well as joint investment projects in third countries.
  • Both sides agreed to cooperate to sign an MOU on establishment of Establishment of a Strategic Petroleum Reserve in India. Both sides also agreed to increase cooperation in the crude oil sector, including through training, and human resources development.
  • They agreed to expand their collaboration in renewable energy and in international negotiations on climate change. They acknowledged the importance of ensuring synergies between the ISA and IRENA.
  • They agreed to work closely together on a range of security issues, particularly on counter-terrorism, maritime security, and cyber-security.
  • In the area of defence cooperation, the two sides renewed their commitment to strengthening the existing cooperation in training, joint exercises, and participation in defence exhibitions, as well as in identifying opportunities to cooperate on the production of defence equipment in India.
  • They strongly condemned extremism and terrorism in all of their forms and manifestations, irrespective of who the perpetrators are and of their motivations. UAE condemned the terrorist attack on the Indian Air Force Base in Pathankot.
  • The two leaders also agreed to establish an annual Policy Dialogue to discuss issues related to peace in security in their region, and to strengthen their dialogue on regional security issues of mutual interest.

India – UAE Joint Statement during State visit of Crown Prince of Abu Dhabi to India in January 2017

Joint Statement covered various issues under the following heads:

  • Global Issues and Strategic Dialogue
  • Regional Security and Countering International Terrorism
  • Security, Defence and Space cooperation
  • Trade, Investment and Economic Development
  • Energy and Climate Change
  • Space, Electronics & IT
  • Health and Food Security
  • People and Skill development
  • Civil Aviation, Tourism, Culture and Press
  • International and Regional Cooperation

Challenges and Opportunities

  • The two sides have shown greater desire to enhance bilateral relations.
  • There are no outstanding issues or disputes between India and the UAE.
  • But, there are some challenges to be overcome in order to realize the full potential and promises of the growing relations.
  • The systemic problem faced due to slow implementation from Indian side is a major obstacle. Not much progress in $75 billion investment fund even after about two years as the modalities and governance structure for the fund has not been finalized. UAE’s ambassador to India said that the UAE side was ‘ready for it’.
  • India needs to ensure execution of the investment projects with required expertise. As the UAE side lacks the technical expertise and human resources, it will be India’s responsibility to ensure proper returns for the investments and to keep the UAE interested in Indian market.
  • Indian companies operating in the UAE also face problems due to lack of clarity in many aspects of commercial regulations, labour laws and lack of transparency on part of UAE businesses.
  • The bilateral trade has come down significantly in the past four years.
  • New sectors to enhance bilateral trade need to be identified. Potential areas include defence trade, food and agricultural products as well as automobiles.
  • There is also a need to smoothen problems faced by Indian migrants due to cumbersome and strict regulations that favour the UAE employers and at times leads to serious problems for Indian workers, especially unskilled workers.
  • There is untapped potential for Indian health industry and medical sector. India is home to one of the finest human resources as far as the medical profession is concerned and its private hospitals have the necessary infrastructure, facilities and expertise to provide world class medical care within a fraction of the cost spent in developed countries. Hence, medical tourism can be an important area where India can attract UAE nationals.
  • There is potential in the arena of renewable energy. The cost for production and transmission of solar energy in the UAE are a fraction to that of India and this is a priority area for the UAE government.
  • India has some of the finest higher education institutions in engineering and management fields and given their cost-effective and world-class education, they can be a major attraction for UAE students who are looking for acquiring higher education and better skills.
  • In defence sector, there is a need to further enhance cooperation through joint training programs for Indian and UAE officers.
  • India can also increase the number of Emirati officers who can avail training in its defence schools.
  • This will lead to greater familiarisation within the defence establishment as both the countries move towards enhancing greater defence engagement.
  • The 2017 visit of Crown Prince is an important step towards building a new strategic partnership.

Watch the YouTube video with full explanation:

This video discusses and explains India-UAE (United Arab Emirates) Relations in detail.

This video is useful for the aspirants of the UPSC Civil Services Examination (for IAS, IPS, IFS, and Group-A Central Services). This lecture is also useful for aspirants of other competitive examinations, such as SSC, Bank PO, LIC, RBI Assistant, RBI Grade B, State Public Service Commission examinations like RPSC, UPPSC, MPSC, MPPSC, HCS, RAS, CLAT, Hotel Management entrance, BBA and several other examinations.

This video has been prepared by Dr. Ashok Dhamija, a former IPS.

 

 

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