India-UAE relations have experienced a notable transformation in recent years, evolving from a traditional buyer-seller dynamic to a multi-faceted strategic partnership. This shift is underscored by burgeoning economic ties, bolstered by investments in sectors ranging from energy to infrastructure. Additionally, both nations have collaborated closely on matters of security, counter-terrorism, and regional stability, reflecting a shared commitment to combatting common threats. Moreover, cultural and people-to-people exchanges have deepened, fostering greater understanding and goodwill between the two countries. Against this backdrop, the bilateral relationship between India and the UAE is poised to continue its upward trajectory, driven by mutual interests and a vision for enhanced cooperation across various domains.
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In the news:
A recent article delves into the demonstration of significant alignment and reciprocal regard at various levels within India’s strategic partnership agreements, with a particular focus on the one forged with the United Arab Emirates (UAE).
India’s Bilateral Relations with the UAE
- Historical Diplomatic Ties
- Diplomatic relations between India and the UAE were established in 1972.
- A significant turning point was the visit of India’s Prime Minister to the UAE in August 2015, initiating a new strategic partnership.
- The Crown Prince of Abu Dhabi’s visit to India in January 2017 elevated bilateral relations to a comprehensive strategic partnership.
- Economic Partnership
- Bilateral trade reached USD 85 billion in 2022-23, with the UAE being India’s third-largest trading partner and second-largest export destination.
- Goals include surpassing USD 100 billion in merchandise trade and achieving USD 15 billion in services trade within five years.
- The UAE ranks ninth as an investor in India, with an estimated investment of USD 11.67 billion.
- Cultural Ties
- Over 3.3 million Indians reside in the UAE, fostering cultural familiarity and receptiveness.
- India participated as the Guest of Honour Country in the Abu Dhabi International Book Fair 2019.
- Indian cinema, TV, and radio channels have a significant viewership in the UAE.
- Fintech Collaboration
- Active collaboration in the fintech sector, highlighted by the acceptance of the RuPay card in the UAE since August 2019.
- Operationalization of a Rupee-Dirham settlement system showcases mutual convergence in digital payment systems.
- Energy Security Cooperation
- The UAE plays a vital role in India’s energy security, storing strategic oil reserves in India.
- Agreements, such as investment in the strategic crude oil storage facility in Mangaluru, emphasize the depth of cooperation in the energy sector.
- Strategic Regional Engagement
- Active participation in regional groupings and initiatives like I2U2 and the India-Middle East-Europe Economic Corridor (IMEC) demonstrates shared interests and strategic alignment.
Challenges in India-UAE Relations
- Trade Barriers Impacting Exports
- Non-Tariff Barriers (NTBs) such as mandatory Halal certification pose challenges to Indian exports, leading to a decline in certain sectors.
- Chinese Economic Influence
- China’s economic influence, characterized by low-interest loans, has surpassed Indian endeavors in the UAE and the broader Middle East.
- Kafala System Challenges
- The Kafala system, giving employers significant power over immigrant laborers, raises human rights concerns and challenges for migrant workers.
- Concerns Over UAE’s Financial Support to Pakistan
- Substantial financial aid from the UAE to Pakistan raises apprehensions about potential misuse and its impact on regional security dynamics.
- Diplomatic Balancing Act
- Ongoing conflicts in the Middle East, notably between Iran and Arab nations, pose diplomatic challenges for India in maintaining balanced relations.
Steps Required to Overcome Challenges
- Paving Way for Better GCC Relations
- Leverage the UAE’s strong economic ties within the GCC to enhance India’s strategic presence and access to the Africa market.
- Compliance to UAE’s NTBs
- Focus on transparency and predictability in addressing Non-Tariff Barriers to facilitate smoother trade relations.
- Exploring 2+2 Dialogues
- Initiate high-level 2+2 dialogues with the UAE to address strategic, defense, and political matters for enhanced bilateral understanding.
- Integrating With ‘Vision 21’ of UAE
- Collaborate with the UAE in emerging industries aligned with its ‘Vision 2021,’ fostering economic ties beyond traditional sectors.
- Addressing the Kafala System
- Diplomatically engage with the UAE to advocate for reforms in the Kafala labor system, enhancing the welfare of migrant workers.
Conclusion
- The forthcoming visit by the Prime Minister to the UAE reflects the deepening and multifaceted ties between the nations.
- The relationship encompasses robust economic partnerships, cultural exchange, and collaboration in key sectors, demonstrating a model of convergence and mutual respect poised for further strengthening.
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Source: TH
Frequently Asked Questions (FAQs)
Q: What is the current state of economic cooperation between India and the UAE?
A: India and the UAE share a robust economic relationship, with bilateral trade surpassing USD 60 billion annually. The UAE is one of India’s largest trading partners in the Gulf region, with significant investments flowing in sectors such as energy, infrastructure, and technology.
Q: How do India and the UAE collaborate on security matters?
A: India and the UAE have forged close ties in security cooperation, particularly in counter-terrorism efforts and intelligence sharing. Both nations recognize the importance of regional stability and have cooperated on initiatives to combat common security threats effectively.
Q: What role does the Indian diaspora play in India-UAE relations?
A: The Indian diaspora in the UAE, numbering over 3 million, serves as a vital bridge between the two countries. They contribute significantly to the UAE’s economy and society while maintaining strong cultural ties with India. This diaspora acts as a catalyst for enhancing people-to-people connections and fostering bilateral relations.
Q: How are India and the UAE collaborating in the energy sector?
A: Energy cooperation is a cornerstone of India-UAE relations, with the UAE being a significant supplier of crude oil and petroleum products to India. Additionally, both countries are exploring opportunities for investment and collaboration in renewable energy, aligning with their shared goals for sustainable development.
Q: What cultural exchanges are taking place between India and the UAE?
A: India and the UAE actively promote cultural exchanges through various initiatives, including festivals, art exhibitions, and educational programs. These exchanges deepen mutual understanding and appreciation of each other’s cultures, further strengthening the bonds of friendship between the two nations.
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