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India-UAE relations

  • IASbaba
  • July 1, 2022
  • 0
International Relations
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Context: Prime Minister visit to the UAE on June 28 was his fourth visit, given the fact that no Indian PM had visited the UAE for 34 years since the visit of Indira Gandhi in 1981, the transformation in India’s engagement with this Gulf state has been quite extraordinary.

India-UAE relations

  • India and the UAE established diplomatic relations in 1972.
  • India and United Arab Emirates (UAE) enjoy strong bonds of friendship based on age-old cultural, religious and economic ties between the two nations.

Economic Co-operation

  • The UAE was India’s third-largest trading partner in 2021-2022, and second-largest for both exports ($28 billion) and imports ($45 billion)
  • The UAE accounted for 6% of India’s total exports and 7.3% of imports in the last financial year
  • The UAE’s investment in India is estimated to be around U.S. $11.67 billion, which makes it the ninth biggest investor in India.
  • Under India’s revamped FTA strategy, the Government has prioritised at least six countries/regions to deal with, in which the UAE figures at the top of the list for an early harvest deal (or Interim Trade Agreement)
  • Recently, the Comprehensive Economic Partnership Agreement (CEPA) between India and the United Arab Emirates (UAE) was signed.
  • CEPA provides for an institutional mechanism to encourage and improve trade between the two countries.

Energy Partner

  • The UAE accounts for 8 percent of India’s oil imports and was fifth largest supplier of crude oil to India.

Indian Diaspora

  • Around 3 million Indians are living harmoniously in the UAE.
  • The remittances from the UAE in the first half of 2020 accounted for US $21 billion.

India’s West Asia policy: 

  • 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.

Strategic Importance

  • The UAE, due to its strategic location, has emerged as an important economic centre in the world.
  • In 2017 the two sides signed the agreement on Comprehensive Strategic Partnership (CSP).
  • The region is home to important strait like Strait of Hormuz – which plays important role in ensuring energy security of east Asia

Space Cooperation

  • Space cooperation between India and the UAE gained quick momentum during Prime Minister visit to the Emirates in 2015.
  • Together, the two space agencies have developed the nano-satellite, Nayif-1, which was launched from the Satish Dhavan Space Centre, Sriharikota in India.
  • The two countries are likely to work together on Emirates’ ‘Red planet Mission’.

Co Operation at Multilateral Forums like United Nations, West Asia Quad that includes India, Israel, UAE and USA

Challenges

Non Tariff Barriers (NTBs):

  • Non-Tariff Measures (NTMs) have mostly been covered by Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT).
  • The UAE has 451 SPS notifications and 534 TBT notifications.
  • The SPS notifications are mainly related to live poultry, meat, and processed food. In addition, the TBT notifications are mainly related to fish, food additives, meat, rubber, electrical machinery, etc.
  • These measures hamper India’s exports to UAE.

Arab – Iran Conflict:

  • The differences between Iran and the Arab world hinder India’s engagement in the Middle-east region. Balancing the relationship sometimes results in reluctance of some strategic agreements.

Kafala System:

  • The inhuman conditions imposed by the Kafala system on immigrants sometimes create differences between the two countries.

Growing Intolerance in India:

  • The recent crack caused due comments on Prophet Mohammed by members of ruling party spoils the positive atmosphere between two countries.

Way forward

  • India should take steps to fight growing intolerance in the country and make sure that such incidents do not affect its relationship with other countries
  • The countries should focus on completing their MOUs in order to take their relationship to the next level.
  • They should establish more strategic dialogues between them like the 2+2 dialogue.
  • India-UAE must try to bring more transparency and predictability in the use of NTBs so that their compliance becomes less cumbersome.
  • In recent years, the UAE, through its ‘Vision 2021’, has sought to diversify its economy and reduce its dependency on oil. This provides an opportunity for India to engage with it in new areas of renewable energy, start-ups, fintech, etc.

Shared economic visions and geopolitical outlooks have spurred the two sides to seek to expand cooperation across multiple domains. Both nations should come together to further engage with each other, bilaterally as well as on multi-lateral fora, based on mutual trust and confidence. The recent visits by high delegation have created a fresh opportunity for even greater India-UAE coordination and cooperation.

Source: Indian Express

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