India-UAE partnership can be a game-changer
UAE Crown Prince Mohamed bin Zayed Al Nahyan's state visit to India builds on Prime Minister Narendra Modi's standalone trip to the Emirates last year. Viewed together, they indicate how Abu Dhabi is emerging as New Delhi's new best friend in the Arab world. Of course, India and the UAE have always had good relations with each other; however, as with much of the Arab world, those ties were framed within the Pakistan dynamic. Today, there is a perceptible shift away from those old geo-political calculations, with India-UAE ties steadily coming into their own. The bilateral now stands on three pillars: Trade, security and energy. In the first case, India is already the UAE's largest non-oil trade partner, accounting for about 9.8 per cent of its trade in this sector. India is also the largest importer of goods from the UAE and the third largest exporter. Bilateral trade amounted to $60 billion in 2014, making the UAE India's most important trade partner in West Asia and North Africa. The goal now is to push bilateral trade up to $100 billion by 2020. An important element of this plan is Emirati investment in large Indian infrastructure projects. The UAE has a large sovereign wealth fund of around $800 billion which can be leveraged to accelerate growth in India. Also, the UAE itself is looking to diversify its economy which is heavily dependent on oil revenues, and investments in India will help in this regard. An agreement on infrastructure investment was one among the more than half-a-dozen pacts signed during the visit, while a $75 billion infrastructure investment fund was announced during Mr Modi's visit last year. The second pillar of the bilateral, which has now become a comprehensive strategic partnership, is security cooperation. Towards this end, an agreement on cyber security was signed while extensive deliberations were held on combating terrorism, including threats from the Islamic State, and enhancing bilateral cooperation in maritime security and defence. Notably, the UAE is already working with India to extradite several wanted individuals. It has been more than cooperative by sending back to this country several persons wanted here on various charges, including terrorism. In 2013, the UAE extradited three individuals to India who were facing terror charges in this country.
The third and most entrenched pillar of the bilateral is oil and energy trade. India imports more than 80 per cent of its oil from the Gulf countries, and the UAE fulfills about nine per cent of Indian demand. In the run-up to the Crown Prince's trip, it was announced that the UAE's national oil company will be storing crude oil in one of India's three new oil storage facilities. The UAE will store about 0.75 million tonnes at the Mangalore facility, of which 0.50 million tonnes will be offered to India for domestic use. This is a first of its kind deal and is testimony to the emerging strengths of the India-UAE bilateral. But while these deals, pacts, and joint statements have received the much deserved attention, the gentle indicators of how Mr Modi reciprocated the warmth with which he had been received in the UAE, by breaking protocol and receiving the Crown Prince at the airport, truly served as the proverbial cherry on the cake.