When the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE armed forces, Sheikh Mohammed Bin Zayed Al Nahyan was invited to become a chief guest at India’s 68th Republic Day function, it was common knowledge that New Delhi would have done so after evaluating several pros and cons. Moreover, in the background of the fact that India was for the first time giving a red carpet welcome to a leader for its Republic Day function — a leader who was neither a head of state nor head of government — New Delhi could hardly afford to take any decision without assessing economic and strategic significance.
In fact, by inviting the Crown Prince for its very important national-day function, India showed that it is ready to bet on the future; it is ready to give a warm embrace to a leader who is highly popular not only in the UAE, but also across the Gulf. Therefore, both symbolism and substance were attached behind the Crown Prince’s invitation.
Of them all, no less high on symbolism was according UAE armed forces a rare honour of being a part of parade at India’s important national-day function. After France, the UAE was only second country whose troops were invited to participate at the Republic Day function along with the contingent of Indian armed forces. Indeed, all of this also spoke volumes of trust and mutual understanding between the two nations.
Strengthening of bond between India and the UAE
Narendra Modi became the first Indian Prime Minister to visit this Gulf country in 34 years when he landed in Abu Dhabi in August 2015. Indira Gandhi was the last Indian Prime Minister to undertake a state visit to the UAE in 1981. Even as dust on Modi’s visit to this Gulf nation had not settled down, Crown Prince Al Nahyan made a visit to India in February 2016.
Since then a personal bond and chemistry between the two leaders only firmed up. For this, however, several reasons are attributed, including the UAE Crown Prince’s personal reputation as a moderate and pro-development force and who is equally critical about terrorism. In September 2016, when terrorists belonging to Pakistan’s Jaish-e-Mohammad attacked Indian army’s base camp in Uri in Jammu and Kashmir and killed 19 soldiers there, the UAE was the first Gulf nation which not only condemned the barbaric terrorist attack, but also supported “all actions it (India) may take to confront and eradicate terrorism.”
This encapsulated, in one way, a decline of Pakistan’s influence in this Gulf nation, which was until 2015 regarded as the prime offshore financial centre of Islamabad. Prime accused of the 1993 Mumbai serial blasts, Dawood Ibrahim, facilitated by Pakistan, used to invest in Dubai without facing any encumbrance.
Dominant factor behind India-UAE relations
The most dominant factor which led India recently to open itself to the UAE in a more resplendent manner, is the latter’s ability to fund New Delhi’s huge infrastructure demand. Besides possessing huge oil and gas resources, the UAE is sitting on $800 billion worth of sovereign fund. During the UAE Crown Prince’s visit, though, the much talked about pact on the creation of $75 billion India-UAE infrastructure bond could not materialise, yet it is an agreed fact that Abu Dhabi is keen to become part of India’s growth story.
Of the total 80 per cent investment made by Gulf countries in India, the majority has come from the UAE. Till March 2016, Abu Dhabi accounted for $8 billion worth of investment in India — around $4.03 billion in Foreign Direct Investment (FDI) and the rest in portfolio. On the trade front also, the UAE is India’s third largest trading partner after China and the US.
In 2015-16, the two-way trade stood at around $50 billion. By 2030, the two-way trade is expected to touch around $160 billion, a far cry from 1971 when trade between the two countries was merely $180 million. However, what is adding to the robustness of the two countries’ ties is the presence of an estimated 2.6 million strong Indian expatriates in the UAE. They are source of billions of dollars’ worth of remittances in their motherland.
Is there a strategic factor behind close ties between India and the UAE?
Yes. The two countries’ diplomatic engagement took a significant headway when they decided to elevate their bilateral relationship to a comprehensive strategic partnership level. With this, security and defence cooperation are expected to grow manifold between the two nations. It should be noted that the UAE is one of the countries which is situated along the vast stretch of the Indian Ocean.
At the time when China, flushed with surplus money and military power, is perceived as a threat to peaceful movement of ships and cargoes in the Indian Ocean, this elevation of India-UAE ties to a comprehensive strategic partnership level would help the two sides in strengthening security in the maritime domain also.
Of the fourteen agreements that the two countries signed during the Crown Prince’s visit, establishment of defence cooperation between the two nations presents clearly as to what they would do in the field of defence and security.
The UAE’s agreement with India to cooperate in the areas of armaments and defence industries broadly speaks of the fact that the former is keen to become a part of New Delhi’s ‘Make in India’ initiative. Though it is on paper presently, the planned joint production of military equipment between India and the UAE, on implementation, would help India find a big market for defence products in the Gulf region.
Is energy security also a factor behind close bilateral relations?
India sources a sizeable basket of crude and gas from the UAE. But what is adding a significance to India’s energy security is the UAE’s decision to store its crude oil in India. While it will pave the way for setting up of a framework for the storage of UAE generated crude oil in India, it would also help New Delhi in deriving benefits out of this facility. It would enable India in having first rights to the stored crude in case of an emergency, an issue of high strategic significance.
Pakistani leaders must take some time and think what they could not achieve in the Gulf despite sharing common religion and ideology. India, on the other hand, gained upper hand both economically and strategically in the region just because of its positive outlook and development-oriented vision.