PM's UAE Visit Must Bridge the Strategic Gulf

The UAE’s importance has been overlooked by India’s foreign policy establishment, though it is significant not only for its proximity but also for strategic reasons.

Published: 16th August 2015 06:00 AM  |   Last Updated: 16th August 2015 11:18 AM   |  A+A-

sathish misra1

Prime Minister Narendra Modi’s two-day visit to the United Arab Emirates (UAE) on August 16-17 is a timely move for both economic as well as strategic reasons. Though belated, the visit is a crucially significant step because the UAE has emerged as the financial nerve centre of the Arab world and Dubai is fast emerging as the meeting point for adversaries and friends.

The UAE’s importance has been overlooked by India’s foreign policy establishment, though it is significant not only for its proximity but also for strategic reasons.

The PM will be meeting the top leadership of the UAE, which will include Crown Prince of Abu Dhabi, Sheikh Mohammed bin Zayed Al Nahyan, and Vice-President Sheikh Mohammed bin Rashid Al Maktoum. This will offer an excellent opportunity to convince his dialogue partners that the strengthening of bilateral ties in trade and commerce, and mutual investments could be a stabilising factor in such stormy times when a phenomenon like the Islamic State of Iraq and Syria (ISIS) is threatening countries and societies in the region.

The UAE is home to a 2.6 million-strong Indian expatriate community. Indians there are the largest remitters globally, sending home $12.64 billion in 2014. India is also the third largest source of tourists for the Gulf country. The bilateral trade crossed $50 billion in 2014-15, and has the potential to grow further if the political leaders of the two countries take an interest in removing hurdles and adopt a focused approach. The UAE was India’s third largest trading partner in 2014-15, after China and the US.

Unfortunately, the importance of UAE has been overlooked by the Indian foreign policy establishment in recent years, despite its significance not only for its proximity but also for strategic reasons.

Indian governments, having been caught in the Shia-Sunni schism in the last three decades, were not prepared to take initiatives, lest it may be misconstrued by the local Muslim constituencies.

Modi is taking his first trip to the Gulf, but the fact remains that no Indian Prime Minister has been to the UAE since 1981 when Indira Gandhi visited.

Former Prime Minister Manmohan Singh was expected to visit the UAE in 2010 and then again in 2013, but plans did not materialise and an opportunity to expand bilateral ties was lost. Though President Pratibha Devisingh Patil paid a state visit to the nation in November 2010, this was obviously not a substitute for a prime ministerial visit.

At the end of 2013, the two countries had signed a Bilateral Investment Promotion and Protection Agreement. While it is estimated that the UAE’s investments in India are worth around $8 billion, with a $2-billion commitment towards infrastructure, Indian investments in Dubai and Abu Dhabi are said be around $55 billion.

If talks of the Prime Minister during his two-day visit to the UAE are successful, it is possible that a part of over $773 billion sovereign funds with the Abu Dhabi Investment Authority could be used for infrastructure projects in India. Till now, Abu Dhabi has been investing in European and American infrastructure projects.

Besides, Modi will also woo the rich Indian community in Dubai to invest more in their native country. Almost 20 per cent of the business community either hails from India or has strong Indian connections. The Prime Minister has meetings  planned with the expatriate community in both Abu Dhabi and Dubai, where Indians will be hosting receptions for him.

The UAE has the potential to contribute significantly to India’s energy security. India is importing about 9 per cent of its oil from the UAE, and with prices of crude oil hovering around $50 per barrel, a long-term view could be taken by the leadership of the two countries to further augment oil supply.

While the UAE offers huge potential for expanding economic and trade ties, it will be in India’s long-term interests if Modi could also initiate steps for laying the foundation for a security and strategic relationship. This could cover areas like counter-terrorism, military and maritime exercises, and intelligence sharing.

Misra is a Senior Fellow at New Delhi-based Observer Research Foundation

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