NEW DELHI // The UAE and India will strengthen their economic and strategic relationships during a three-day visit by Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces.
Sheikh Mohammed arrives in New Delhi on Wednesday, along with a delegation of seven ministers, government officials, economists, and nearly 100 business executives. He is scheduled to meet Prime Minister Narendra Modi and other Indian officials in the capital on Thursday.
Sheikh Mohammed is also expected to visit India’s president Pranab Mukherjee. He will also travel to Mumbai for the Invest in India symposium.
The visit follows from Mr Modi’s two-day trip to the UAE last August — the first by a sitting Indian prime minister in 34 years. This is Sheikh Mohammed’s first official visit to India.
The two countries are expected to sign at least 16 agreements across sectors such as energy, information technology, aerospace and railways, which will see investments worth billions of dollars by the UAE into India.
Out of the 16 agreements, “almost 12 have been finalised and [are] ready for signature”, Dr Ahmed Al Banna, the UAE’s ambassador to India, said on Monday. The agreements, he added, will create “a huge investment portfolio” in the Indian energy sector in particular.
India and the UAE have old and deep economic interests in each other.
About 2.6 million Indians live in the UAE, and they account for nearly US$15bn (Dh55.1bn) of remittances into India every year, said Gauri Khandekar, the deputy director of the Global Relations Forum, a Brussels-based think tank.
India is also hungry for foreign investment, and Mr Modi canvassed the UAE’s investors actively during his August visit. By the end of that trip, the two countries announced a $75bn fund to develop infrastructure in India.
At the moment, the UAE is the 10th biggest foreign investor — and the biggest Arab investor — in India, with investments of roughly $10bn. Of this, around $3.3bn is in the form of foreign direct investment, while the remainder is comprised of portfolio investments.
India and the UAE also plan to boost bilateral trade by 60 per cent by 2020, to a value of $100bn. A forecast from the UAE’s ministry of economy predicts that India will become the UAE’s biggest export market by 2030, absorbing 14 per cent of all goods exported.
Between 2014-15, trade between the two countries was valued at $59.15bn, making India the UAE’s largest trade partner, according to the UAE embassy in Delhi. India imported $26.13bn worth of goods, while in turn it exported goods worth $33.02bn, according to figures from India’s ministry of commerce and industry.
This represents a decline from 2011-12, when bilateral trade reached its peak of $72.67bn, a result of the global economic slowdown. The UAE is India’s third-largest trading partner.
Ms Khandekar also said India and the Gulf Cooperation Council have, for several years, been attempting to put together a free-trade agreement to boost trade. “As a whole, the GCC is itself the largest trading partner of India, way ahead of even the European Union,” Ms Khandekar said.
Dr Al Banna said on Monday of the free-trade agreement: “We want it to be signed as soon as possible.”
The ambassador also said that, when Sheikh Mohammed meets Mr Modi, the two countries will sign “an agreement on nuclear energy cooperation. This will be on peaceful use of nuclear energy. There will be setting up of research and development centres.”
Mr Modi and Sheikh Mohammad promised, last August, to work closely together against terror.
"Terrorism poses a grave danger to humanity," Mr Modi told The National on the eve of his August visit. "All countries who believe in humanity must stand together without delay. This is extremely necessary to challenge the forces of terrorism."
The two leaders had promised to counter extremism, share intelligence, and constrict international money flows that fund terrorist and radicalisation activities.
Since then, the UAE has been quick to condemn terrorist attacks on Indian soil. In early January, after six terrorists stormed an air force base and killed eight people in Pathankot, in northern India, the UAE issued a strong statement against the perpetrators.
“In the wake of this heinous attack, the UAE is encouraged by the determination of the international community to work hand in hand to investigate the incident and address the issue,” the statement said.
“In terms of security,” Ms Khandekar said, “there’s no doubt that India will need to maintain close relations with [the UAE] to maintain security at home.”
ssubramanian@thenational.ae
* An earlier version of this article said Indians in the UAE sent home almost half of their country’s $69bn in annual remittance flows. In fact, they account for nearly $15bn of remittances into India every year.