President of UAE Visit to India

Syllabus: GS2/International Relations

Context

• President of the United Arab Emirates Sheikh Mohamed bin Zayed Al Nahyan paid an official visit to India.

Major Outcomes

• Defence: Letter of Intent between India and the United Arab Emirates on the Strategic Defence Partnership.
• Energy: India signed a $3 billion deal to buy liquefied natural gas from the United Arab Emirates, making it the UAE’s top customer.
• Bilateral Trade: The two sides agreed to double bilateral trade to over US$ 200 billion by 2032.
• Nuclear Cooperation: It was agreed to develop a partnership in advanced nuclear technologies, including development and deployment of large nuclear reactors and Small Modular Reactors (SMRs) and cooperation in advanced reactor systems, nuclear power plant operations and maintenance.
• Investment: Letter of Intent on Investment Cooperation between Gujarat, India and the United Arab Emirates for Development of Dholera Special Investment region.
• Establishment of a supercomputing cluster in India: It has been agreed in principle that C-DAC India and G-42 company of the UAE will collaborate to set up a supercomputing cluster in India.
• Space: Letter of Intent between the Indian National Space Promotion and Authorisation Centre (IN-SPACe) of India and the Space Agency of the United Arab Emirates for a Joint Initiative to Enable Space Industry Development and Commercial Collaboration.

Significance of the Visit

• Strategic & Geopolitical Significance: It comes in the backdrop of the sharp escalation in tensions between the UAE and Saudi Arabia over Yemen.
  • Signals UAE’s support for India’s role as a net security provider in the Indian Ocean Region (IOR).
• Economic & Trade Cooperation: Builds momentum around the Comprehensive Economic Partnership Agreement (CEPA). UAE is among India’s top trading partners and major investors.
• Regional Security Realignments: The speculation of a new Islamic Nato comprising Saudi Arabia and Pakistan, along with Turkey, is also of great concern to the UAE.
  • This has left the UAE to look for an independent security partner in India.
• Concerns Related to Iran: The UAE has a strong interest in preventing further escalation involving Iran, as any military confrontation could destabilise the entire Gulf region.
  • India’s balanced diplomacy and goodwill with regional stakeholders are seen as stabilising factors contributing to regional de-escalation.
• Invitation to Board of Peace: US has invited India to join the “Board of Peace”, the body formed and led by the US to oversee peace and reconstruction in Gaza.
  • UAE is a part of this Board however India has not accepted the invitation, many view this visit as a way to convince India to join suit.
• People-Centric Ties: With 3.5 million Indian expatriates in UAE, this emphasis on labour mobility, skill exchanges, and cultural links.

Bilateral Ties Between India and UAE

• Political: India and the United Arab Emirates (UAE) established diplomatic relations in 1972.
  • Relationships were upgraded to a Comprehensive Strategic Partnership (CSP) in 2017.
• Economic & Commercial: CEPA was signed in 2022, since the agreement, bilateral merchandise trade has nearly doubled from USD 43.3 billion in FY 2020-21 to USD 83.7 billion in FY 2023-24.
  • UAE is the second largest export destination of India (after the US) with an amount of nearly US$ 31.61 billion for the year 2022-23.
  • Bilateral trade is expected to surpass $97 billion, with targets to hit $100 billion in non-oil trade.

• Defence cooperation: It  is steered through a Joint Defence Cooperation Committee (JDCC) at the Ministry level, with the signing of Agreement on Defence Cooperation in 2003, which came into effect in 2004.
  • Extradition and mutual legal assistance treaties to combat transnational crime.
• Space Cooperation:  Indian Space Research Organisation (ISRO) and the UAE Space Agency signed an MoU regarding cooperation in the exploration and use of outer space for peaceful purposes in 2016.
• Indian Community: Indian expatriate community of approximately 3.5 million is the largest ethnic community in UAE constituting roughly about 35% of the country’s population.
• Multilateral Cooperation: India and the UAE are currently part of several plurilateral platforms such as India-Middle East EU Economic Corridor (IMEC),  I2U2 (India-Israel-UAE-USA) and UFI (UAE-France-India) Trilateral, etc.

Challenges

• Trade Imbalances: India has a trade deficit with the UAE, primarily due to high oil imports from the UAE, which makes the economic relationship uneven despite growing non-oil trade.
• Geopolitical Tensions in the Region: Political instability in the Middle East and the Gulf region affect bilateral relations, especially with India’s strategic interests in the region.
• Labor and Migration Issues: India is one of the largest sources of migrant labor in the UAE, and issues related to the welfare and rights of Indian workers have been a point of concern.
• Foreign Policy of UAE: India’s relations with countries like Iran and Pakistan sometimes complicate its relations with the UAE, which maintains different strategic priorities in the region.

Way Ahead

• The visit aims to strengthen trade, defence, energy, technology, and people-to-people ties.
• Both the countries focus on scaling up defence ties, including training exchanges and increased collaboration between defence industries.
• Strengthened ties through the large Indian diaspora in the UAE, facilitating cultural exchange and collaboration in various sectors.

Source: MEA