1. India and UAE: A Comprehensive
Partnership in 21st Century
Zakir Hussain
Research Fellow
Indian Council of World Affairs
Sapru House, Barakhamba Road
New Delhi, India
1

2. India and UAE: A Comprehensive Partnership in 21st Century
2

3. Dr. Zakir Hussain1
If bilateral visits are the barometer of growing intimacy between the two nations, India
and the United Arab Emirates perfectly stand fit to this parameter. In less than six
months, four high level visits have been exchanged between the two countries. The
visit of the UAE’s Foreign Affairs Minister, Abdullah bin Zayed al Nayahan to India on
15-16 May carries historical significance in many sense. For the first time, UAE has
openly acknowledged the need for working together with India on some of the
pressing common regional issues such as such as stabilizing Afghanistan, combating
maritime piracy as well as stabilizing Somalia,2 the homeland of piracy in the Gulf of
Aden, as well as showed concerns over the religious and sectarian faultlines emerging
in the Gulf. Sheikh Al Nayahan also expressed his satisfaction over the improving
India-Pakistan relations, and hoped to equiv-balance India and Pakistan. Otherwise,
India has always been termed as “friendly” nation while Pakistan, “brotherly”.
Furthermore, the visit of Sheikh Abdullah provided the much-need impetus to the
growing economic and strategic engagements between the two countries as he
described India as an “ally and cherished neighbour”, and said that UAE would like to
have a “strong presence” in the Indian market in future.
India and UAE have enjoyed strong bonds of friendship since 3000 BCE. Culture,
religion, polity and economic interactions have played a lead role in cementing and
enhancing their bilateral nexus. However, the bilateral relations took off particularly
after the accession of Sheikh Zayed bin Sultan al Nahayan as ruler of Abu Dhabi in
1966 and the formation of UAE Federation subsequently in 1971. Thereafter, the
bilateral engagements between India and the UAE grew at a faster than with any other
country of the region. Both counties signed plethora of agreements and MoUs, ranging
from economy, polity, security, science & technology, hydrocarbons, agriculture to
1
Dr. Zakir Hussain is Research Fellow at Indian Council of World Affairs, Sapru House, Barakhamba Road,
New Delhi. He is an economist, having rich experience on almost all bilateral issues between India and the Gulf
and the issues of gulf itself. His area of research is Political Economy of India and the Gulf. He can be accessed
at: shahabzakir@gmail.com. His mobile no: +91-7838608840.
2
UAE Foreign Minister Visits India, http://defenceforumindia.com/forum/foreign-relations/36494-uae-foreign-
minister-visits-india.html
3

4. human resource development, recreational activities, including culture, sport, to
tackling extradition, crime and preventing inimical uses of the sea and ensuring
maritime security, etc.3
Trade and Commercial Nexus
Trade and commerce has played crucial role in developing the bond of friendship
between the two countries. Since ancient time, UAE has been India’s trade corridor to
the Gulf and beyond. However, major impetus occurred when Sheikh Zayed bin Sultan
al Nahayan assumed the charge of the UAE and emphasised over outward economic
policies. Similarly, India in the post-1990 period liberalised its economy and trade
became one of the major growth indices. This established a strong synergy between
the two countries. The volume of bilateral trade jumped from just $170 million
annually in 1970s to more than $67 billion in 2010-11, making UAE India’s largest
trading partner, even exceeding China and the USA. UAE accounts 10 to 14 percent of
India’s total trade. Bilateral trade is expected to surpass $103.6 billion by 2025,
according to an HSBC report.4 The significant of Indo-UAE trade lies in its non-oil
component, enabling India to enjoy favour balance of trade over the last few years.
(see Table 1). However, henceforth, when India’s oil import from UAE grows, India’s
trade with UAE will also witness imbalances.5
Table 1
India-UAE Trade, 2002-3/2010-11
(in US$ million)
Year 2002-3 2003-4 2004-5 2005-6 2006-7 2007-8 2008-9 2009-10 2010-11
Export 3327.48 5125.61 7347.88 8591.79 12,021.77 15,636.91 24,477.48 23,970.40 34,349.10
%
-- 54.04 43.36 16.93 39.92 30.04 56.54 -2.7 43.3
Growth
Import 956.99 2059.85 4641.10 4354.08 8655.28 13482.61 23791.25 19499.10 32753.16
%
-- 115.24 125.31 -6.18 98.79 55.77 76.46 -18.04 67.97
Import
Total 11,988.9 43,469.5
4,284.47 7,185.46 15,945.87 20,677.05 29,119.52 48,268.72 67,102.26
Trade 8 0
3
For detailed discussion on Agreements and MoUs signed between India and the UAE see….
4
Claire Ferris-Lay, “Banking for Masses”, Arabian Business, 20 October 2011, http://
m.arabianbusiness.com/banking-for-masses-427391.html
5
For instance, bilateral trade with Kuwait amounts to $10 to 12.27 billion, however, India exports only $2.5
billion, rest is imported. Similarly, trade with Saudi Arabia is $25 billion, of which only $5 billion rest India
import, i.e. $20 billion. With Qatar, total bilateral trade is around $ 4.6 billion- import $3.7 bn while export is
$900 million.
4

5. %
-- 67.71 66.85 7.98 59.72 40.83 65.76 -9.94 54.37
Growth
Trade
2370.49 3065.76 2706.78 4237.71 3366.50 2154.30 686.23 4471.30 1595.94
Balance
Source: DGCIS, Kolkata.
Investment Opportunities- Building Long-term Partnership
Investment offers massive scope for establishing stable and strategically long-term
relationships between India and the UAE as trade potentials between the two has
almost reached to its saturation point i.e. $68 billion. Furthermore, on account of
certain developments that has taken place in recent months in New Delhi such as
improving economic ties between India and Pakistan, signing of INSTC (International
North South Transport Corridor) and TAPI (Turkmenistan, Afghanistan, Pakistan and
India) has reduce the chances of growth in trade as these transport corridors would
directly connect these countries to India hitherto doing business via the UAE. As a
result, as these direct transit corridors become operative, UAE significance as a trade
corridor linking Gulf, Iran, Central Asia and part of North Africa will drastically
decline.6
Another possible reason of shrinking trade interactions between India and the UAE is
the continued global economic meltdown, which has drastically affected the US-West
economic capability to attract foreign investments, while on the other hand, the fast
emerging economies of the east, particularly India and China, having strong economic
fundamentals, promises high return to the foreign investments. One more reason of
the UAE investors to focus their investment priorities towards the eastern economies,
particularly India, is “home grown”. The cash-rich Gulf monarchies are engaged into
intense competition amongst themselves, particularly in select industries such as
banking and finance, real estate, Islamic banking and Islamic finance, stock exchange,
etc; consequently, this leaves little scope to outshine and grow. Already the UAE,
which had relatively suffered more from the economic recession due to greater
6
For instance, total trade between India and Pakistan is estimated around $10 billion, with a potential to grow
around $15 to $20 billion; however, due to bad relations only $2.5 billion trade is formally taking place, while
$7 to $8 billion trade is taking place via UAE, particularly Dubai. This will definitely feed into UAE share of
trade which used to go to Pakistan via Dubai.
5

6. exposure to the world economy, is yet to recover fully; its free-port cities have
performed dismally, recoding just only 3.5 percent growth. Hence, it is not in position
to venture into risky business.
The UAE investors, both public and private, have shown keen interest in India’s
sunrise sectors such as real estate, retail sector, downstream, petrochemicals and
fertilizer industry, which promises better and stable returns. Looking at the
investment prospects, UAE’s Foreign Minister during his media interaction said that
“India is not only a very important ally and a neighbour to the UAE, but it’s a booming
economy worldwide. There is potential of $1 trillion of investment in India in the next
five years. India is looking for half of that amount to come from abroad. We would
very much like to see a strong UAE presence in that.”7 At this occasion, both India and
the UAE announced to establish a High Level Joint Task Force “to explore investment
opportunities” in both the countries.
Indeed, UAE has already been India’s 10th largest investor, investing nearly $1.8 billion,
concentrating mainly in five areas: energy (19.1 per cent), services (9.3 per cent),
programming (7.8 per cent), construction (6.8 per cent), and tourism and hotels (5.6
per cent). EMAAR Group, RAK Group, DP World, and Nakheel, Estisalat DB Telecom,
are some of the UAE companies active in India. Table 2 presents the trends in UAE
investments in India.8
Table 2
__________________________________
(in $ million)
Investment from
Year Total investment Percentage of UAE
UAE
2000-1 1.58 2907.52 0.05
2001-2 23.56 4221.89 0.56
2002-3 15.11 3133.85 0.48
2003-4 16.81 2634.21 0.64
2004-5 39.27 3758.94 1.04
2005-6 49.2 5545.94 0.89
7
India an “ally and cherished neighbour”: UAE Foreign Minister, http://www.defence.pk/forums/world-affairs/
181360-india-ally-cherished-neighbour-uae-foreign-minister.html#ixzz1vmnkcZ92
8
http://www.moft.gov.ae/images/releasesen/159.pdf
6

7. 2006-7 259.9 15726.19 1.65
2007-8 257.84 24580.95 1.05
2008-9 257.05 27330.82 0.94
November 555.65 19379.60 2.87
2009
Source: Ministry of Trade, UAE.
Correspondingly, the Indians have also emerged as one of the important investors in
UAE. They have invested in several areas such as tourism, catering, retail, food items,
service and manufacturing sector. According to a recent report issued by Dubai’s
Ports, Customs and Free Zone Corporation, India was Dubai’s top trade partner in
2011, constituting AED 206 billion or 19 per cent of Dubai’s total foreign trade of AED1.1
trillion last year. The Dubai Chamber of Commerce and Industry has more than
20,000 Indian companies registered. According to one report of the Ministry of
Foreign Trade, UAE, “The value of Indian investments in the UAE reached 2.5 billion
USD, accounting for 7 per cent of the total volume of direct foreign investment in 2007
and these investments were concentrated in manufacturing activities with a total
value of $156 million, in the field of construction and contracting with a total value of
$1.5 billion, and $844 million in the rest of the sectors.”9 Major Indian companies
engaged in joint ventures in UAE are Tata, Reliance, Wipro, NTPC, Larsen & Toubro,
Dodsals, and Punj Lloyd, Oberoi, , Hinduja group, Pioneer Cement.
The growing presence of the Indian business and professional community in UAE has
induced the Indian Trade and Exhibition Centre (ITEC), Middle East, to publish first-
ever official directory. The directory will list more than 10,000 Indian businessmen. 10
As a part of developing and mixing up with local business milieu, the Indian Business
Leader Forum (IBLF) at Dubai has undertaken a unique initiative to learn Arabic and
understand the UAE culture with a view to assimilate themselves locally”.11
UAE- India’s Energy Hope
9
http://www.moft.gov.ae/images/releasesen/159.pdf
10
The directory will be released by October 2012. According to Chairman of the ITEC, Mr. Sudesh Aggarwal
that the listing of more than 10,000 Indian businessmen in the directory underscore the value of trade and
brotherly relations existing for centuries between the two great countries.
b
11
Indian Businessmen Vow to learn Arabia in UAE, The Times of India, October 12, 2011.
http://timesofindia.indiatimes.com/nri/other-news/Indian-businessmen-in-UAE-vow-to-learn-
Arabic/articleshow/10324215.cms
7

8. India is a well know energy-deficient country in the world; it resources 80 percent of
its total crude demand from outside and the Gulf meets nearly 60 percent. In this, Iran
plays crucial role by supplying 12 percent of the total. However, under the “Iran Threat
Reduction Threat Act (December 2011)”, India is under intense pressure from the US to
cut or drastically minimise its energy nexus with Iran; Since 2008-09, nevertheless,
India started diversifying its oil imports, and over the last three years, India cut nearly
29.5 percent of its oil import from Iran, from 22 MMT in 2008-09 to 17.5 MMT in
2010-11 and has planned to cut 11.4 percent further, down to 15.5 MMT for the year
2011-12.
To maintain its growth momentum, India is looking for additional sources to
compensate the Iranian share. This raises the energy significance of the UAE, which is
sitting on 8.8 percent of the global oil reserves with a shelf life of 100 years. During this
visit, the UAE Foreign Minister, Sheikh Abdullah, assured India that UAE would be a
“trusted and reliable energy partner”. While visiting to UAE, in April 2012, India’s
Foreign Minister S.M. Krishna said: “In United Arab Emirates we have a dependable
supplier of oil. In 2010, we imported 12 million tonnes and in 2011, we increased it to 14
million tonnes. So this would be the indication at the rate at which our import from
UAE is going up.” Now, UAE has emerged as India’s fourth-largest oil supplier, after
Saudi Arabia, Iraq and Iran. Mr Krishna added that it was decided to set up a high-
level joint task force on investment which will also look into securing more oil
supplies from UAE.12
UAE has also been attracted towards India’s growing petrochemical, downstream and
fertilizer industries. India’s domestic petrochemical industry is estimated at around
$40 billion and is expected to grow at 12–15 per cent over the next five years.13 UAE’s
interest in the matter offers a huge opportunity, both in terms of finance and getting
stable and secured oil supply at reasonable rates. According to McKinsey, “By 2020,
India has the potential to grow in the speciality chemical industry (dyes, pigments,
12
http://www.mofa.gov.ae/mofa_english/portal/b2ed8c93-96f6-4751-88b1-135944cd2923.aspx
13
“Petrochemical Industry to Grow at 12-15% a year: Assocham”,
http://www.thehindubusinessline.com/industry-and-economy/article2885625.ece
8

9. pesticides, fertilizer, colourings) from $22 billion to between $80–100 billion ... the
speciality chemical industry could lead to $20–25 billion investments and can create 7–
8 lakh additional jobs.14
India’s fertilizer sector also offers massive scope for cooperation between the two
countries. In 2010-11, India imported around 4.069 million tonnes of potassic
fertilizers, which is its total requirement of this product. In the case of phosphorus-
based fertilizers, during the same year, India imported 90 per cent of its total demand,
around 4.2 million tonnes.15
India’s downstream industry is one of the largest in Asia. Globally, between 1999 and
2009, its share in refining capacity grew from 2.7 percent to 3.9 percent. Currently,
India has a surplus petroleum production; its 18 refineries, both public and private, are
producing approximately 184 MMT, while domestic consumption is 130 MMT; by 2013,
total production is planned to reach 238.5 MMT. Foreign markets, especially the East
Asian markets, provide a big margin of returns on investment in this sector. UAE’s
interest in India’s downstream sector at this juncture is a welcome opportunity as both
India’s private companies and UAE’s oil majors can engage and benefit by competing
with China, Singaporean and Middle Eastern refineries.
Increasing cooperation in the energy sector with the UAE will also allow India to
establish a long-term strategic energy partnership. UAE has approximately 8.8 per
cent deposits of the global recoverable oil, and at the current reserve-to-production
(R/P) ratio, its shelf life is estimated at around 100 years.16
14
“India’s specialty chemical business can grow to $ 80-100 billion by 2020: McKinsey”, The Economic
Times, 8 February 2012,
http://articles.economictimes.indiatimes.com/2012-02-08/news/31037798_1_specialty-chemicals-chemicals-
industry-mckinsey
15
Economic Survey of India, 2011-12.
16
It is estimated that at the end of 2009, Saudi Arabia controlled around 22.4 per cent of the world’s oil
deposits; Iraq accounted for 9.8 per cent; Kuwait for nearly 8.6 per cent; and the UAE for 8.3 per cent. In terms
of the Arab world, which has 57.8 per cent deposits of the global oil, UAE has 14.4 per cent deposits.
9

10. Migration and Tourism – Building the Bridges
Diaspora and tourism have worked as a two way flow to cement as well as revive the
millennia-old ties between India and UAE. The deep network established by the
diaspora community opened up the scope for ‘people-to- people’ interactions. This
promoted tourism in both the countries. Indian business and working community
carried the Indian ethos and filled the ‘information gap’ about India; this generated
strong urge among the UAE citizens to visit and explore the “Incredible India”. .
At present, Indians are the largest expatriate community, approximately 1.75 million,
around 40 percent of total Arab population. Among them, 15 to 20 per cent are
professionally qualified, 20 per cent are non-professionals (clerical staff, shop
assistants, salesmen, accountants), and the remainder (65 per cent) are blue-collar
workers.17
However, managing such a huge overseas community, where their own population has
become a minority, has not been an easy task for the emirates of UAE. Reports of
harassment, delayed payment, long working hours, below-standard residential
amenities and lack of health and hygiene, particularly of female and blue-collar works,
are frequently reported. Realising the gravity of the problem, in 2006, both the
countries signed MoU on Manpower Souring, which again revised in September 2011,
during the visit of UAE Labour Minister Saqr Ghobash to India. Over the period, the
authorities of both the countries undertook several measures to reduce the avoidable
hardships. Among them are: tightening the recruitment agencies, imparting pre-
migration orientation programme, forming India Mission House with a 24- hours
helpline and establishing the Indian Workers resource Centre (IWRC) at Dubai,
providing a 24-hours helpline; formation of Indian Community Welfare Fund (ICWA)
to provide to provide food, shelter, medicines, passage expenses, etc. to destitute
workers/households.18 19
17
India UAE Relation, http://moia.gov.in/pdf/UAE.pdf.
18
India-UAE Relations, http://mea.gov.in/mystart.php?id=50044537
10

11. Looking at the growing volume of traffic, the two countries’ aviation authorities signed
a Bilateral Civil Aviation Agreement in 1989, which again amended in 2004, providing
multiple designations of carriers, following Abu Dhabi’s launch of Etihad Airlines.20 At
present, there are approximately 450 flights per week between India and UAE. This
has helped not only the workers’ community to easily transit but facilitated the visits
of the business community and tourists as well. Underlining the significance of the
Indian travellers, in a press release on 25 April 2012, Dubai International reported that
“India has continued to retain its position as the top destination country in terms of
passenger traffic for Dubai International ... The number of passengers travelling
between India and Dubai increased by 7 per cent in the first quarter of 2012, reaching
1,824,307, compared to 1,704,180 during the same period in 2011 ... A total of seven
airlines connect Dubai to 17 destinations across India.”21 The United Nations’ World
Tourism Organization forecasts that more than 50 million Indians will undertake
outbound travel by 2020.22 In 2001, UAE received 246,335 Indian tourists, which
increased to 336,046 in 2002, 357,941 in 2003 and 356,446 in 2004.23
Similarly, India also attracts sizeable numbers of tourists from UAE. In 2007 around
32,750 tourists arrived in India, which increased to 63,502 in 2008. However, in the last
couple of years, their number has dipped, from 47,234 in 2009 to 45,482 in 2010.24
Although the share of UAE tourists in total arrival of tourists in India, which increased
from 1.9 million in 1991 to 12.99 million in 2010, is less than one per cent, their high per
capita income makes them luxury-oriented tourists. On an average a UAE tourist
19
During his visit to the UAE in April 2012, India’s Foreign Minister SM Krishna, stressed the need for
understanding the local cultures and traditions so the Indian workers could easily be adaptable. He “asked
Indian embassies in Gulf nations to actively engage local governments to better the living and working
conditions of millions of Indians in the region, who are the largest contributors of remittances back home” “SM
Krishna asks embassies in gulf to look after Indian expats”, Economic Times, 15 April 2012,
http://articles.economictimes.indiatimes.com/2012-04-15/news/31345303_1_indian-expatriates-gulf-region-
embassies
20
http://moia.gov.in/pdf/UAE.pdf
21
http://www.dubaiairport.com/en/media-centre/Pages/press-releases.aspx?id=83
22
Ibid…n. 16. According to Dubai Tourism and Commerce Marketing, more than 700,000 Indian visitors
stayed at Dubai hotels in 2011.
23
“Indian Tourism Statistics, 2010. Government of India, Ministry of Tourism, Market Research Division”,
http://tourism.gov.in/writereaddata/CMSPagePicture/file/Primary%20Content/MR/pub-OR-
statistics/2010Statistics.pdf
24
Ibid., n.18.
11

12. spends nearly 150,000 Indian rupees. Medical tourism is a strong segment of UAE
tourists visiting India.
Defence and Strategic Cooperation – Need of the Time
India’s growing naval stature in the Indian Ocean on one hand and the growing
menace at sea, including maritime security, piracy, inimical uses of sea such as
smuggling, gun running, trafficking and dugs, have brought the two countries to
cooperate and initiate serious defence and security dialogues. In June 2003, India and
the UAE signed an MoU on defence cooperation, followed by setting up a Joint
Defence Cooperation Committee (JDCC). Cooperation in defence was supplemented
with a corresponding annual “strategic” dialogue between the two countries. Potential
areas of cooperation in defence fields underlined are: providing training to UAE
defence personnel, production and development of defence equipment, conducting
joint exercises, especially naval and coast guard, sharing information on strategy and
doctrines and regular exchange of programmes related to security and defence,
technical cooperation in Intermediate Jet trainers, cooperation in military medical
services and jointly combating pollution caused by military at sea as well as
cooperation in defence production industries, etc. At the first JDCC meeting, the two
sides agreed to support defence exhibitions in each other’s country by deputing its
platforms and personnel.25
Besides naval engagements, India and UAE have also conducted Joint Air Force
exercises at the Al-Dhafra base in Abu Dhabi. Since 1995, India has been regularly
participating in all international defence exhibitions (IDEX) organized by the General
Exhibitions Corporation of UAE. Some companies such as Bharat Earth Movers Ltd.
and Bharat Dynamics Ltd. participate in these. The participants have supplied items
such as uniform, boots, etc. to the local Police Department.
During Mr Krishna’s visit, Sheikh Abdullah acknowledged that for resolving piracy in
the Gulf of Aden both countries were working together “very closely”.
25
http://www.indembassyuae.org/induae_bilateral.phtml
12

13. Looking for Enhanced Engagement
There are several potential areas where both countries can engage and enhance and
benefit from their mutual cooperation. Some potential areas are as follow:
● Establishing Synergy in Hydrocarbons - Indo-GCC Gas Pipeline
Looking at the R/P ratio, UAE’s oil deposits are inexhaustible for the coming 100 years.
This opens a window of opportunity for UAE to offer India acreages to share and
explore its oil-rich regions. Indian companies such as OVL, IOL and Reliance
Petrochemicals have the capacity to assist, train and finance oil projects in Abu Dhabi,
where 90 per cent of UAE’s hydrocarbons are deposited.
One significant area where India and UAE can engage is building undersea pipelines.
Recently, India and Oman have signed 40-year gas supply contract of this nature: the
gas will be supplied through undersea pipeline; the cost is estimated around $4.5
billion.26 India and UAE can also think of extending the Dolphin Project up to the
Indian border or the Indo-Omani pipeline may be converted into Indo-GCC Gas
Pipeline.27 Qatar, which is India’s LNG supplier, may also join the group; Iran may also
join the Indo-GCC Pipeline later on.
India’s domestic pipelines which connects the western coast to the eastern coast, can
convert the Indo-GCC Gas Pipeline into a vehicle to target the East Asian gas market
making India’s eastern coast as ‘hub’. This will help reduce not only the marine
pollution, sea line congestion at the Strait of Hormuz but also open up Asian gas
market to the Gulf countries, which find touch to sell to the western market, which is
also ready facing the saturation and tough competition with the Russian gas
companies.28 Indo-GCC Gas Pipeline will engage multiple partners; hence give India a
better leverage to manipulate the energy politics.
● Nuclear Power Generation
26
India-Oman Gas Pipeline Plan, PFI Issue 20, http://www.pfie.com/oman-india-pipeline-plan/379319.article
27
The idea of building an Indo-GCC Gas Pipeline was first suggested by this author in his doctoral thesis.
Which is on India-GCC Political Economic Relations in the Post-1990 Period,
28
For detailed discussion see this author’s unpublished thesis.
13

14. UAE is among the first nations in the Gulf region to successfully meet all the
procedures for owning nuclear capability for civilian purposes and has established
Emirates Nuclear Energy Cooperation (ENEC) in 2009 to deliver safe, clean and
efficient nuclear energy to the country. In addition, Abu Dhabi awarded contracts
worth $20 billion to South Korean firms for building the first nuclear energy plant in
the country, which is anticipated to be completed in 2017. Nuclear power will account
for 23–25 per cent of Abu Dhabi’s electricity supply in 2020. 29 India is well known for
its nuclear capability as well as for being a responsible nation in nuclear-related
matters. This opens scope for the two countries to develop a trustworthy relation in
this field as well. Although South Korea’s KEPCO has bagged all the contracts to run
the nuclear facilities in UAE, India may be a reliable partner, particularly offering its
rich experience and manpower services. Another area where India and UAE can work
in future is converting silica into thorium. Both countries have abundant silica
resources and India’s third-generation nuclear plan is based on thorium; the vast silica
resources on Kerala beaches will be of immense help.
● Non-conventional energy sources
UAE has launched a 12 billion dirham Mohammad bin Rashid al Maktoum Solar Park,
which will eventually produce 1000 megawatts of power. According to the Dubai
Integrated Energy Strategy 2030, the government is looking to diversify the source of
energy, defining the target for renewable energy to supply 1 per cent of Dubai’s energy
by 2020 and 5 per cent by 2030: most of it will be solar. 30 One of the largest solar
missions in Abu Dhabi is the MASDAR city project. The UAE government has also
established an Ocean Thermal Energy Conversion (OTEC) unit. Silica is a good source
of geo-thermal energy. In all these fields, India and UAE can share their expertise and
resources. Indian companies such as LANCO and Indo-Solar are doing business and
talks with India’s TERI (Energy Research Institute) are also going on. However, the
29
Ayob Kazin, “UAE’s Future Energy Plan”, Pacific Controls, 17 January 2012,
http://pacificcontrols.net/news-media/uae-future-energy-plans.html
30
Zaher Bitar, “Shaikh Mohammad launches Dh12b solar power project”, Gulf News, 9 January 2012,
http://gulfnews.com/business/investment/shaikh-mohammad-launches-dh12b-solar-power-project-1.963515
14

15. two countries need to have a better and more coordinated pro-active policy in non-
conventional sources of energy.
● Islamic Banking and Islamic Finance
India’s vast Muslim population provides a huge market for Islamic banking and
Islamic finance, which operates on “interest-free” (Riba-free) banking principles.
Besides this, India is one of the largest non-Arab Arabic knowing/speaking countries
in the world. This fact will overcome the language barrier as well. Otherwise, the
English-speaking population has the requisite ability to carry forward business
activities, both in India and UAE. Arabic-speaking India scholars can assist the
emirates to handle their stock exchange-related issues as well.
● Health and Pharmaceutical
India has acquired an acclaimed status both for providing low-cost world class medical
services as well as low-cost and reliable generic medicines. Over the past few decades,
its pharmaceutical industry has grown to be worth nearly $24 billion and has now
acquired a status of reliability and confidence, particularly in low-cost life-saving and
AIDS medicines. India can establish a joint medical association and target the Gulf,
North African and the Central Asian regions easily and effectively. Telemedicine,
medical tourism and online treatment are a convenient mode, which reduces time,
expenditure plus provides immediate relief to the patients. The Indian medical
community, including care-workers, has been globally known for its efficiency and
dedication.
● Research and Higher education
India within its scarce resources and in a limited time span has proved its mettle in
education and research. UAE can benefit from India’s experience and build a strong
R&D foundation and nurture an indigenous “knowledge community”, which will work
as a bridge between the two nations.
15

16. ● India’s Balancing Act in the Region – Building Trust among Arabs
and Persians
Since India has deep historical, political, economic and cultural relationships with
almost all the Trucial and Levant states, plus Saudi Arabia and Iran, it can play a key
role in resolving and minimizing the trust deficit among all these nations. Looking at
the multiplicity of India’s own society, the Indian model can provide a suitable
solution or model to these countries passing through a high phase of transformation.
Coexistence, secularism and liberal democratic setup may be helpful in reducing as
well as minimizing the acrimony arising in the form of Shia-Sunni divide, Arabs versus
Persians and inter-tribal conflicts. India is the second-largest home of Muslims in the
world, with the second-largest Shia population after Iran. Its system has well absorbed
as well as handled not only the different religious groups but also ethnicities, races
and regional diversities.
● Defence and Strategy - Contingency Planning
Since 2003, although both countries have started their engagements in defence and on
a limited scale in strategic fields by holding an annual strategic dialogue, looking at
the growing instability in the region in general and on the seas in particular, the two
countries need to expand their engagements more widely and thoroughly. The
growing menace of piracy, alliance of pirates with terrorism, termed as “terro-piracy”,
increasing inimical uses of the seas in the region on one hand and UAE’s vulnerability
and India’s growing naval capability on the other, make close naval-related
relationship between the two countries a pragmatic affair. In recent years, Somalia has
become notorious not only for piracy but also for allying terror groups such as al-
Shabab with Yemen-based AQAP (al-Qaeda of Arabian Peninsula). About 25,000 ships
transit annually through the Gulf of Aden. Looking at the threat to the narrow Strait of
Hormuz, through which one-fifth of the world oil passes daily, India and UAE along
with other Gulf littoral countries such as Bahrain, Kuwait and Oman need to move at a
higher level of defence deals.
16

17. Another strategic area where India, which enjoys close relations with Iran as well, can
play a key role as mediator to help UAE is to resolve its dispute with Iran on the three
islands, Abu Musa, Greater Tunb and the Lesser Tunb, which are under Iran’s
occupation since 1971.
Other areas where India and UAE can cooperate and work together are: climate,
managing marine pollution, ensuring better transit of oil though the Strait of Hormuz,
as well developing joint mechanisms in tackling piracy, water desalination, developing
crop seeds suitable to arid and hot regions, and cooperation in aquaculture and
fisheries, etc. India’s peninsular shape makes it a natural maritime power in the
Indian Ocean.
The Ignored Horizons
There are also some grey areas where the two countries need to work and improve
their existing relationships. Foremost is the labour issue. India is the largest supplier
of human resources to the UAE; the Indian citizens in UAE play a crucial role in
developing and sustaining UAE’s growth and development. However, the interest of
the expatriate community is not effectively protected; neither are they adequately
covered with welfare programmes. Kharjis (expatriate workers) are differently treated
in terms of wage, working hours, and residential and medical facilities. The women
migrant workers have their own specific problems. Although the two countries have
signed a manpower agreement in 2006 and revised it in 2011, there is slow progress in
implementing their provisions. Some issues like minimum wage, provision of pension,
health insurance and developing some mechanism to safeguard loss against currency
fluctuation to the expatriate workers, should also be taken under consideration.
Issues like black money, extradition of criminals residing in various parts of UAE,
balancing bilateral relations between India and Pakistan also need serious policy
consideration by UAE authorities. This will not only add momentum to India-UAE
bilateral relations but also help raise the image of UAE, in terms of soft power, among
common Indians.
17

18. Prescient Thoughts
The changing strategic configuration in the Gulf has created a new permutation and
combination both in terms of strategic and economic interests. Europe is facing crisis
and the US economy is in doldrums, while the Indian economy shows promise. The
reasons for India’s positive outlook might be the sustenance of the services industry
and less reliance on exports. Importantly, the new region of the Indian Ocean is
gaining international attention. In the 6th policy document which was released by the
US in January 2012, it was stated that the Indian Ocean as a region is gaining critical
mass both in terms of economic sustenance and increasing interdependence. Also, the
revival of the IOR-ARC through India has propelled new developmental objectives and
better integration of production and manufacturing networks, showing new
alternatives to the globalizing world. IONS (Indian Ocean Naval Symposium), which
was seen as an informal gathering, is now getting better attention to the extent that
the West Pacific Naval Symposium and IONS are stated to be integrated together for
better naval and maritime monitoring. This helps India’s purpose, strategically and
economically as well.
The countries of the Gulf region have been eying India for governance and structural
reforms and also to bring about incremental change in governance structures. In this
light the visits of the high-level Indian delegations to Oman, Qatar and Bahrain, which
included military delegations supplemented with return visits from these countries,
show the increasing relevance of the region for India. Chinese ships that have been
deployed in the Gulf of Aden have been visiting these countries and docking at their
ports both for entertainment and refuelling. This provides India the required strategic
angle to engage with these countries. In this context, UAE emerges as one country
which is seen as an important hub: the historical and cultural linkages provide the
necessary foundation for a closer strategic relationship between the two countries.
India’s relationships with the Gulf region in general and the UAE in particular has
although been more than 3000 millennium old; the connection between security and
18

19. stability between the two countries has been realised for the first time in 1981 when
Mrs. Indira Gandhi visited and met the UAE President Shaikh Zayed. Both the leaders
explicitly stated that “peace in one region was important for peace in the other
region”.31 Sheikh Zayed said “at a regional level, we also look forward to an increased
involvement by India in issues affecting the Gulf and neighbouring countries” and that
“it is in both of our interests to work together more and more closely.32 In 2005, India
propounded the “look west policy” and acknowledged Gulf as its extended
neighbourhood and expressed to share the fruits of India’s growth and development
with the Gulf countries, including the UAE.
Over the period, India has developed some significant stakes in the region; its more
than 6 million diaspora community with 29 percent (1.75 million) are working and
living in the UAE alone; they are religiously remitting more than $35 billion annually
to India; India carries out approximately $120 to $130 billion trade with the region with
UAE as its largest trading partner; and moreover, India resources 60 percent oil from
the region in general and more than 10 percent from the UAE in particular.
Looking at the transforming security scenario in the Gulf of Aden, particularly the
growing and expanding menace of piracy and threat to the safety and security of the
merchant shipping on one hand and India’s growing naval stature in the Indian Ocean
on the other, brought both the countries to seriously engage into security and
strategic dialogues.
31
Gulshan Luthra Peace in the Indian Subcontinent and Strategic Gulf Interlinked: India and UAE Exemplify
Friendship, June 27, 2007, http://www.indiastrategic.in/topstories19.htm
32
Ibid., n.6.
19