UAE and India had shared a bond of trust and companionship since a pretty long time. The Indian-Arabic relationships can be dated back to 2800 B.C. during the early era of the Sumerian dynasty. With 3.42 million Indians residing in UAE, this country is almost a second home to Indians. The bond had only gotten stronger over the years and they now share a common aim to help each other in these post-Coronavirus pandemic times to recover their economy and enhance their global business prospects.
Growth in economy of the two countries in the last two decades as per World Bank’s analysis:
- UAE: The economy of UAE has enhanced 4 times over the last two decades. In 2000 UAE’s GDP was $104 billion per annum and in 2019 the GDP grew to $421 billion per annum.
- India: In 2000 GDP was $468 billion per annum while in 2019 GDP was $2869 per annum. This makes India the 5th largest economy in the world.
UAE is the 9th biggest investor and the 3rd largest trading partner in India and has a total investment of approximately $10 billion to $11 billion. The Bilateral Investment Treaty (BIT) signed by both countries in December’2013 protects their individual investments in the other country. Currently, bilateral trade is about $60 billion annually and it is estimated that this would grow up to $100 billion annually.
This estimate is based on discussions and decisions made in the 8th meeting of UAE-India High Level Joint Task Force on Investments in November’2020. Sheikh Hamed bin Zayed Al Nahyan, Member of Executive Council of the Emirate of Abu Dhabi and Piyush Goyal, Minister of Railways and Commerce & Industry, Government of India represented their respective countries in this event.
As per discussions in this meeting, the future of UAE-India trade hold big promise:
- In the Food Sector: Emaar group is expected to invest $5 billion in mega food parks. Additional $2 billion to be invested in infrastructure and contract farming. Benefit for UAE would be availability of low-cost food and assurance of food security. In India lack of state-of-the-art infrastructure causes about 30% wastage of agricultural produce. So these investments would be beneficial to India as well.
- Abu Dhabi Investment Authority (Adia), the sovereign wealth fund is anticipated to invest $1 billion in mid-income and affordable housing projects in major cities across India.
- Indian Government’s decision to sell its 53.3% stakes in Bharat Petroleum Corporation (BPCL) opens door to privatize it. It is expected to increase competition in the fuel market. If UAE invests in this, it would have access to 34 million ton refining capacity and would have a steady customer for its crude oil.
- Abu Dhabi’s EMKE Group had developed the largest shopping mall in Kochi and work on the 2nd largest one (LuLu) is expected to begin soon.
- UAE is also investing in infrastructure. DP world had already invested $1.2 Billion and expected to invest another $1.8 billion in the future.
- Resolution of issues being faced by UAE investments thanks to the Securities and Exchange Board of India (SEBI) Foreign Portfolio Investor Regulations 2019 would enhance UAE investments in India.
With such big investments planned in the future the bilateral UAE-India trade is estimated to go up to $100 billion annually.
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