Why is relationship between India and UAE important? - Part1

Critical Analysis of why relationship between India and UAE are important

Since 3000 BCE, relations between India and the seven emirates which now make up the United Arab Emirates were traditionally close and brotherly. The UAE and India had enjoyed close and friendly ties based on historic and cultural ties but have suffered many setbacks due to the UAE support for Pakistan. India and UAE share centuries-old ties of commerce, culture and kinship. 

Today, the Indian community of over 2.5 million is a major part of UAE's vibrant society and its economic success. It also makes a significant economic contribution to India and constitutes an indelible human bond of friendship between the two nations. People-to-people contacts and barter trade for clothes and spices from India in exchange for dates and pearls from the region have existed for centuries. After the creation of the Federation in 1971, India-UAE relations flourished. Today UAE and India share political, economic and cultural links.

Economic Relations:

The traditionally close and friendly India- UAE bilateral relationship has evolved into a significant partnership in the economic and commercial sphere. India-UAE trade, valued at US$ 180 million per annum in the 1970s, is today around US$60 billion making UAE, India’s third largest trading partner for the year 2013-14 after China and US. The two countries have been the largest trading partners for the last several years except in 2011-12 and 2013-14. Moreover, UAE is the second largest export destination of India with an amount of over US$ 30 billion for the year 2013-14. For UAE, India is the largest trading partner for the year 2013 with an amount of over US$ 36.27 billion (non-oil trade).

India's exports to the UAE are well diversified with a large basket. 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. Total FDI from UAE to India is estimated to be US$ 2.89 billion (November 2014). UAE is the eleventh biggest investor in India in terms of FDI. 

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UAE’s investments in India are concentrated mainly in five sectors: Construction Development (16%), Power (14%), Metallurgical Industries (10%), Services Sector (10%) and Computer Software & Hardware (5%). Prominent UAE companies such as DP Word, EMAAR, RAKIA etc. have invested significantly in various sectors of the Indian economy. Several prominent private and public sector Indian companies and banks are also operating in the UAE. 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 the UAE. There are 700 direct flights per week between various destinations of India and the UAE. On April 23, 2013 Jet and Etihad Airways signed an US$ 8 billion agreement. Etihad airlines agreed to invest US$379 million in Jet Airways for a 24% stake in the shareholding. At the first meeting of India-UAE High Level Task Force on Investment (HLTFI) held on February 18, 2013 in Abu Dhabi, Abu Dhabi Investment Authority (ADIA) announced its plans of investing US$ 2 billion in Indian Infrastructure sector. It was decided to establish six sub committees in the areas of infrastructure, trade and investment, aviation, energy, manufacturing & technology; and Information and communications. The second meeting of HLTFI was held in Mumbai on March 3, 2014

Defense Relations:

Bilateral Defence Interaction between India and UAE has been steadily growing in consonance with other aspects of the bilateral relationship. There have been regular high level exchanges at the level of Service Chiefs, functional level exchanges and military education exchanges between the countries. The ships of the Navies of both countries have regularly made port calls enhancing bilateral defence co-operation. India and UAE hold an Annual Defence Dialogue to discuss the security and defence co-operation issues between the two countries.

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Defence co-operation between the two countries is steered through a Joint Defence Co-operation Committee (JDCC) at the Ministry level and Naval Staff Talks at the HQ level which identified new areas of co-operation between the two nations. A permanent resident Defence Adviser (DA) has been posted to this Mission with effect from March 2013. After the establishment of the DA’s office, bilateral defence co-operation has been strengthened further, notably in the field of defence training and regular exchange programs.

Visit of Commander UAE Land Forces to India in Nov 2006, the visit of Indian Chief of Naval Staff (CNS) in Jan 2007 and participation by Commander Naval Forces (CNF), UAE in the IONS-2008 meet in New Delhi were major steps in furthering the relationship. Indian Air Force (IAF) participated in an exercise with the UAE Air Force (UAEAF) in Sep 2008. CNS visited UAE for IONS-2009. There have been goodwill visits of Indian Naval Ships to the UAE too. Three Indian Ships, INS TEER, INS KRISHNA and Indian Coast Guard Ship (ICGS) VEER visited the UAE ports in March 2011. ICGS SAMUDRA PRAHIRI made a port call in Feb 2013 (during IDEX-2013).

CNS was on a goodwill visit to UAE in April 2013. Flag Officer Commanding-in-Chief of Western Naval Command visited UAE in Sep 2013 to further strengthen the Naval co-operation. INS MYSORE, INS TABAR, INS TARKASH and INS ADITYA were also on port call to UAE in Sep 2013. A delegation from National Defence College of India visited UAE as a part of Strategic Neighborhood Study tour in Sep 2013. India also sent a representational JS level delegation to Dubai Air Show 2013. Greater interaction between the armed forces of both countries is under progress.

there is lot more to it . We need to still see how these relationships can be helpful and where it can lead. Click here for : Why is relationship between India and UAE important? - Part2

About the Author:  Pranav Nikam is an Electrical and Electronics engineer who is working in a renowned MNC in Chennai. He likes to work out in gym, do photography and play badminton. Through his articles he wants to spread awareness among other defence aspirants.