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India’s ties with the United Arab Emirates (UAE) are set to get a major boost with the crown prince of Abu Dhabi, Sheikh Mohammed bin Zayed al Nahyan, visiting New Delhi as the chief guest at the Republic Day parade.

In recent years, Delhi has often used this ceremony to send out important signals on the foreign policy front by inviting its key partners. The Modi government has invested significant diplomatic capital towards strengthening its ties with the UAE. With the conclusion of a Comprehensive Strategic Partnership agreement between India and the UAE this week, this relationship is poised for a dramatic leap.

A contingent of 179 UAE soldiers will lead the Republic Day parade. Several agreements, including one on road and maritime transport, are expected to be signed during the visit. The two sides will underscore their commitment to deal with terrorism. They also hope to work closely in Afghanistan, where five UAE diplomats were killed earlier this month in a terror attack and where regional alignments are in flux.

Trade and investment

Currently, India and the UAE have a $350 billion bilateral trade, which they plan to increase three times in the near future. After China and the U.S., the UAE is India’s largest trading partner. The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, is seeking to identify investment opportunities in the Indian infrastructure sector. The $75 billion UAE-India Infrastructure Investment Fund, to support investment in India’s infrastructure sector over a decade, has not seen much progress and the two sides are hoping to put it on a fast track.

The vigour in India-UAE ties today owes its origins to Prime Minister Narendra Modi’s visit to the UAE in 2015, the first by an Indian Prime Minister to the Emirates in 34 years. The joint statement issued by Mr. Modi and Crown Prince Mohammed Bin Zayed Al Nahyan redefined the contours of a relationship that had long lacked political heft. Both sides denounced and opposed terrorism in “all forms and manifestations, wherever committed and by whomever, calling on all states to reject and abandon the use of terrorism against other countries, dismantle terrorism infrastructures where they exist, and bring perpetrators of terrorism to justice.” The target was clearly Pakistan, as they came down strongly on countries sponsoring terrorism against other states. That Mr. Modi could get the UAE, one of the countries closest to Pakistan, to deliver such a message shows how well he had read the changing strategic realities in West Asia. The UAE endorsing India’s concerns on terrorism underscores the challenges facing the Gulf kingdoms at a time when the Islamic State is rising and sectarian divide in the region is widening.

New Delhi has tried to anchor its UAE policy in a broader regional framework as the economic dimension of India’s Gulf policy has become more pronounced in recent years. The Gulf Cooperation Council (GCC) is India’s second-largest trading partner, the largest single origin of imports into the country, and the second largest destination for exports from India. The GCC countries supply 45 per cent of India’s petroleum, with the UAE being the sixth largest source of imports of crude oil. The region remains a major destination for Indian investment. India hopes that major GCC states such as Saudi Arabia, the UAE, and Oman will participate in its planned infrastructure expansion. Meanwhile, the Gulf states are interested in human resources from India in order to develop sectors as varied as information technology, construction, transportation and services.

India’s trade and energy security is inextricably linked to the security of the Straits of Hormuz and Bab-el-Mandeb. With this in mind, the Indian Navy regularly visits Gulf ports, and trains with states in the region. It has undertaken a series of naval exercises with a number of Gulf States in recent years, thereby helping in expanding India’s reach in the region. Indian warships have also been deployed in the Gulf of Aden to carry out anti-piracy patrols.

Expatriate labour

In addition, Indians are the largest expatriate community in the GCC states, numbering around 7 million. There are an estimated 2.6 million Indians in the UAE alone. Indian expatriate labour constitutes around 30 per cent of the total population of the UAE, and Indians have a significant presence in Bahrain, Oman, and Qatar. India receives around 52 per cent of its remittances from its Gulf expatriates, which have contributed significantly to India’s economic resurgence, even as there have been growing concerns about the living and working conditions in the host countries. India is pursuing manpower and labour agreements with Gulf states to help Indian workers in the region. It has also launched the eMigrate system for recruitment of Indian workers across the 17 Emigration Check Required countries.

India is well positioned to emerge as a credible security and economic partner of the UAE and the larger Gulf region at a time when the West is looking inwards and China’s rise is getting hobbled by its aggressive rhetoric on territorial issues. India-UAE ties are an exemplar for the changing Indian approach towards the wider region.

This commentary was first published in The Hindu.

Harsh V. Pant
27 January 2017

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