Diplomatist Magazine Diplomatist September 2019 | Page 37

SPOTLIGHT
its strategic petroleum reserves at Padur. Strategically this
means that India would be able to establish strong connect
with producers who wish to supply oil to Asian consumers
and establish a ground presence in the Indian market. The
other significant energy deal is an agreement with Adnoc for
exploration rights for the Abu Dhabi Onshore Block 1 to a
consortium of three Indian companies. What all this indicates
is that India and the UAE have moved beyond the buyer-seller
relationship in the realm of energy to a strategic recognition
of the other’s potential and value.
The other trigger for a more intense India-UAE
engagement is the economic and business one, with India’s
target of achieving USD 1.7 trillion worth of investments in
the coming five years shaping New Delhi’s outreach strategy
globally. Clearly, the third visit of Prime Minister Modi to the
UAE in the last four years underscores the strategic importance
of the UAE as a source of the crucial foreign inflows that
would be needed to power a
$5-trillion economy. At the
same time, with the UAE
undergoing macroeconomic
shifts fuelled by a desire
to transition from oil
dominated to a more
diversified economy as
outlined in Vision 2021,
India’s economic credentials
and multi-sectoral strengths
offer a solid partnership to
deliver on this objective.
Notwithstanding a few
challenges on the economic
radar and a moderation in
growth, India’s attractive
proposition in terms of opportunities and investments
has found support in Takehiko Nakao, President, Asian
Development Bank who, during his recent visit here, has
expressed his optimism that India “as one of the fastest-
growing economies in Asia and the Pacific is expected
to grow in 2019 at 7.0 percent and in 2020 at 7.2 percent
despite downside risks in the global economy. India has also
recently opened up more investment opportunities through
approval for 100 percent FDI in contract manufacturing and
coal mining which effectively opens the gates for global
manufacturers of electronic goods and other research and
development-intensive products to set up manufacturing
facilities in India and facilitate significant investment in
these sectors.
Rajiv Kher, Distinguished Fellow, RIS, former Commerce
Secretary offers another strategic angle to the India-UAE
dynamics as trading partners which opens up for India a
unique space to leverage on UAE’s strength as an entrepot.
“The UAE is essentially a large trading point from where
goods travel to various directions and where goods come from
various directions. It is a market which does not consume all
the products which is going from India or other parts of the
world. So when we speak of India’s significant exports to the
UAE, this large quantum is not necessarily getting consumed
there. We have to factor in the potential of all the countries
which serve as a catchment area for the UAE,” says Kher.
He takes the example of Central Asia which is becoming an
important destination for Indian products as well as a sourcing
point for India.
“I expect our trade with Central Asia will go up given also
that India is negotiating a free trade pact with the Eurasian
Economic Union comprising some countries of Central Asia
and Russia. That will also help in the flow of trade from Central
Asia to India. All of this can be used by the UAE’s trading
ecosystem to enhance the
inflow and outflow of goods
and services to India,” says
Kher.
Of course, infrastructure
is a potential gamechanger
in the India-UAE economic
equations. The UAE is a
leading player in ports,
airports, highways and
construction and it is
time to leverage on this
advantage and their interest
for fulfilling India’s plans for
the rapid expansion of next-
generation infrastructure
including elevated suburban
corridors, dedicated freight corridors and high-speed
corridors. In road transport, opportunities for investors
range from developing safe, efficient and environmentally
robust road transport across India, exchange and sharing
of knowledge on transportation technologies and transport
policies for passenger and freight movement by roads,
setting up of logistics parks and transportation warehousing
as well as cooperation in planning and management of road
infrastructure.
Indeed, there is a lot that India and the UAE have on the
table. The two Asian powers have all the reasons to take a
quantum leap into the future. n
* Author is a specialist in international affairs (trade and
investment), strategic communications and policy advocacy
with M.Phil in International Relations from the University
of Delhi.
Extraordinary and Plenipotentiary Diplomatist • Vol 7 • Issue 9 • September 2019, Noida • 37