Introduction

• PM Modi recently highlighted the strength of India-UAE relations at the Vibrant Gujarat Summit 2024.
• Bilateral discussions were held with UAE President Sheikh Mohammed bin Zayed, who was the Chief Guest.

India-UAE Relations: Historical Context

India-UAE relations have seen significant milestones:

• India-UAE CEPA: Effective since May 1, 2022, this agreement has slashed tariffs on over 80% of products, facilitating duty-free access for 90% of Indian exports to the UAE. Non-oil trade surged to $50 billion from May 2022 to April 2023, with a $100 billion target by 2030.
• IMEC: The UAE is vital to the India-Middle East-Europe Economic Corridor (IMEC), offering an alternative to China’s Belt and Road Initiative.
• I2U2 Group: Comprising India, UAE, Israel, and the U.S., this group promotes technological and private-sector cooperation in water, energy, and transportation.
• Rupee-Dirham Agreement: The Reserve Bank of India and the Central Bank of the UAE have established a framework for using local currencies in cross-border transactions, reducing dependence on the U.S. Dollar.
• Cultural Exchange: The UAE’s tolerance is evident with the construction of the BAPS Hindu Mandir in Abu Dhabi, the first temple of its kind.

Significance of India-UAE Relations

These relations hold immense strategic, political, economic, and cultural importance:

[A] Strategic Significance:

• Security Concerns: Amid conflicts in the Middle East, the India-UAE alliance enhances both nations’ security, including fighting piracy and terrorism.
• Energy Security: The UAE is India’s sixth-largest crude oil exporter, playing a key role in India’s Strategic Petroleum Reserves Program.

[B] Political Significance:

• Multilateral Reforms: The UAE supports India in various international platforms.
• Counterbalancing China’s Regional Dominance: India’s strengthened relations with the UAE help offset China’s growing presence in the region.
• Engagement with Regional Alliances: Enhanced India-UAE relations could pave the way for India’s membership in organizations like the OIC and a free trade agreement with the GCC.

[C] Economic Significance:

• Remittances: The UAE is a major source of remittance inflows to India.
• Trade and Investments: The UAE is India’s third-largest trade partner, with substantial investments in various sectors.
• Access to the African Market: Relations with the UAE facilitate India’s entry into the African market.

[D] Cultural Significance:

• Safeguarding Indian Diaspora Interests: A robust relationship protects the interests of the large Indian expatriate community.
• Boosting India’s Soft Power: Positive relations enhance India’s soft power in the Middle East.

Challenges to India-UAE Relations

• Trade Restrictions: The UAE’s Non-Tariff Barriers (NTBs), including SPS measures and TBT, have affected Indian exports, particularly in sectors like poultry and processed foods.
• Chinese Economic Influence: China’s “Cheque Book Diplomacy” overshadows Indian enterprises in the UAE.
• Kafala Labour System: Harsh conditions for immigrant laborers, passport confiscation, and delayed wages pose significant issues.
• Financial Aid to Pakistan: Concerns arise due to the UAE’s substantial financial assistance to Pakistan.
• Iran-Arab Dispute: Balancing ties with the UAE and Iran amid their conflict is a diplomatic challenge.

Way Forward

• Clarity in Non-Tariff Barriers (NTBs): Establish transparent NTB practices for smoother trade relations.
• Comprehensive Strategic Dialogue: Initiate high-level dialogues to address strategic, defense, and political issues.
• Harmonization with UAE’s ‘Vision 2021’: Collaborate in emerging sectors to reinforce economic ties.
• Joint Ventures in Technology and Innovation: Encourage collaborations in cutting-edge technology.
• Healthcare Cooperation: Collaborate in healthcare research and public health initiatives.

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