TIES ACROSS THE SEA: ON THE INDIA-UAE CLOSE RELATIONSHIP

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THE CONTEXT: Recent visit of India’s Prime Minister is his seventh visit to UAE since 2014, indicates the government’s desire to bring out the best of the India-UAE relationship in the Gulf region.

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• President of UAE has also expressed his appreciation to PM for accepting the invitation to speak at the World Government Summit 2024 in Dubai.
• Prime Minister has inaugurated Abu Dhabi’s first Hindu temple, the BAPS temple which is built on a 27-acre site in Abu Mreikhah, near Al Rahba off the Dubai-Abu Dhabi Sheikh Zayed Highway.
• India and the UAE have signed agreements to collaborate in areas such as energy, infrastructure, investments, and archive management.

KEY HIGHLIGHTS OF THE PACT

• Bilateral Investment Treaty will strengthen a broad-based investment partnership. It will not only protect existing investments but also promote further capital flows between the two economies.
• Inter-Governmental Framework Agreement on the India-Middle East-Europe Economic Corridor (IMEEC) aims to enhance regional connectivity.
• Memorandum of Understanding for cooperation on Digital Infrastructure Projects will establish a comprehensive cooperation framework. This includes investment cooperation in the digital infrastructure sector and the exchange of technical knowledge and skills. Government and regulatory authorities will form partnerships under this MoU, focusing on high power computing, digital innovation, and data management platforms.
• Memorandum of Understanding in the field of Electricity Interconnection and Trade will focus on green hydrogen, energy storage, and cooperation on energy security and trade.
• Cooperation Protocol between the National Library and Archives of the UAE and the National Archives of India will establish expansive bilateral cooperation in the field of restoration and preservation of archival material. This protocol will also bolster cooperation in archives management via the exchange of expertise, historical information, research, and studies.
• Agreement on interlinking of the instant payment platforms – UPI (India) and AANI (UAE) will enable seamless cross-border transactions.
• Agreement on inter-linking domestic debit/credit cards – RuPay (India) with JAYWAN (UAE) is a significant step in fostering financial sector cooperation, which will boost the universal acceptance of RuPay across the UAE.
• The MoU on the Development of the National Maritime Heritage Complex (NMHC) aims to foster engagement between the two countries to support the Maritime Heritage Complex at Lothal, Gujarat.
• The new initiative Bharat Mart at Jebel Ali, which will further promote bilateral trade and serve as a platform for enhancing the utilization of CEPA by leveraging the strategic location of Jebel Ali port. Bharat Mart would support micro, small and medium sector enterprises from India by providing them an effective platform to reach out to international buyers and promote their products across Middle East, Africa, and Eurasia.

SIGNIFICANCE OF THE RELATIONSHIP:

• UAE is India’s pre-eminent partner in the region in terms of both the strength and the breadth of our partnership. It really extends to every aspect of human endeavour, whether it is food security, energy security, counterterrorism or multilateral cooperation.
• Economy: The UAE is now India’s third largest trading partner, India’s second largest export destination, and fourth largest source of
• Diaspora: A central reason for the UAE being India’s closest partner in West Asia is strong diaspora of Indian community, which has been the most significant contributor to the UAE’s economy since the country was formed in 1971. The diaspora also contributes about 18% of India’s global remittances.
• New developments: There are emerging strategic bond across newer sectors fintech, clean energy and climate action, food security, digital payments, investments, defence and cyber security and education.
• Mutual values of cooperation: There is a mutual value of tolerance and pluralism, and “shared heritage of humanity” which serves as the most significant bonds between the two countries. India-UAE ties are also built on a bedrock of history and cultural engagement that includes centuries-old maritime trade.

ISSUES:

• Trade Barriers Impacting Indian Exports: Non-tariff barriers (NTBs) like Sanitary and Phytosanitary (SPS) measures and Technical Barriers to Trade (TBT), notably mandatory Halal certification, have impeded Indian exports, particularly in sectors such as poultry, meat, and processed foods. These barriers have led to a significant decline in processed food exports to the UAE by almost 30% in recent years.
• Chinese Economic Influence: China’s “Cheque Book Diplomacy,”characterized by offering low-interest loans, has overshadowed Indian economic endeavours in the UAE and the broader Middle East.
• Certain frictional points: While India’s technological prowess and the UAE’s positioning as a trade and industry hub bring complementarities, the changes in their polity and societies bring possible friction points.
• Concern over secularism: UAE as a theocratic monarchy seeks to democratise its governance and have a more pluralistic system, such as the decision on the temple in Abu Dhabi has expressed concern over the rise of majoritarian and sectarian forces in India.

THE WAY FORWARD:

• Streamline trade flows: India and the UAE should work together to address non-tariff barriers that impede Indian exports, particularly in sectors such as processed foods. Both countries can engage in dialogues to streamline regulations and facilitate smoother trade flows.
• Increasing investment: India can boost its economic presence in the UAE by increasing investments in key sectors and exploring opportunities for joint ventures and partnerships. Fostering a conducive business environment and promoting entrepreneurship can attract more Indian businesses to the UAE.
• Counter Chinese influence: India and the UAE can collaborate to counter Chinese economic influence in the region by promoting transparency, sustainability, and fair business practices.
• Addressing concern of migrants: Both countries should work towards improving the rights and welfare of migrant workers in the UAE, including reforming the Kafala system. It can be done by ensuring fair wages, decent living conditions, and protecting workers’ rights.

THE CONCLUSION:

India and the United Arab Emirates share good bilateral relations and India’s recent proactive diplomacy in West Asia has seen the emergence of the UAE as a significant partner. Even though the relations between India and the UAE are acquiring new heights, there are a few challenges and bottlenecks that need to be addressed if the true potential of the bilateral relationship is to be achieved.

UPSC PREVIOUS YEAR QUESTION

Q. The question of India’s Energy Security constitutes the most important part of India’s economic progress. Analyse India’s energy policy cooperation with West Asian countries. (2017)

MAINS PRACTICE QUESTION

Q. How has India-UAE relationship progressed since its inception and highlight the significance and associated frictions of the relationship. Suggest the measures to boost the relationship further, discuss in the context of newer developments in the relationship.

SOURCE: https://www.thehindu.com/opinion/editorial/ties-across-the-sea-the-hindu-editorial-on-the-india-uae-close-relationship/article67860741.ece