When Prime Minister Narendra Modi, in February 2016 received Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, General Sheikh Mohamed bin Zayed Al Nahyan, as he arrived in India on a three-day visit, it was clear that it is no longer going to be business as usual for India and the UAE.
That it is going to be much more than business is now reaffirmed with the visit of Crown Prince Sheikh Mohammed bin Zayed Al Nahyan to India once again to calibrate the growing bonhomie and economic engagement between India and the UAE with a strategic twist.
As a precursor, the UAE and India have held the first meeting of their strategic dialogue to finalise a cooperation agreement, and FICCI wholeheartedly welcomes this. After all, industry has been witness to how the India-UAE bilateralism underpinned by a rich historical legacy of commercial and cultural connect, has seen a steady upswing in recent years and transformation into a dynamic and multi-dimensional economic partnership underscored by Prime Minister Narendra Modi's visit to the UAE in August 2015 followed by Shaikh Mohammad Bin Zayed's visit in February 2016. What has effectively put a seal on the contours of a strategic relationship is the India-UAE dialogue which has shifted the goalposts of strategic cooperation to new areas like renewable energy, defence and security, electronics and information technology, and space.
Of course, a lot has gone into this great build-up. A contagious sense of optimism and excitement and renewed business confidence instilled by emergence of UAE as the second largest market globally for Indian products and as the 10th biggest investor in India in terms of FDI, and that of India as a major export destination for UAE manufactured goods, presence of Indians as significant investors in the UAE, richly complemented by a robust flow of tourists from both sides. An estimated 2.6 million strong Indian expat community has been faithfully sending home remittances (a whopping $12.638 billion reported in 2014), and the UAE has steadfastly held on to sourcing over half of India's global fuel imports.
Things can only get better from here. India is moving swiftly on its commitment to ambitious reforms like the Goods and Services Tax, the government has launched a blitzkrieg of initiatives such as 'Make in India', 'Startup India', 'Digital India' which coupled with a liberalised FDI policy regime is making India one of the most preferred investment destinations globally and opening up tremendous economic opportunities to integrate, innovate, and invest. Likewise UAE which has embarked on a path of sustainable development with focus on achieving a perfect balance between economic and social development and close partnership with the private sector to boost growth, is betting big on economic opportunities in India as evidenced by its decision to invest $75 billion in India's infrastructure over the long term.
Indeed, infrastructure is a potential game changer in the India-UAE economic equations. The UAE is a leading player in ports, airports, highways and construction and it is time to leverage on this advantage and their interest for fulfilling India's plans for rapid expansion of next generation infrastructure including elevated suburban corridors, dedicated freight corridors, high speed corridors, speed raising and modernisation projects for railways and industrial corridors being planned as state-of-art communication arteries that will be the new nerve networks to link the country. In road transport, opportunities for investors range from developing safe, efficient and environmentally robust road transport across India, exchange and sharing of knowledge on transportation technologies and transport policies for passenger and freight movement by roads, setting up of logistics parks and transportation warehousing as well as cooperation in planning and management of road infrastructure. These are tremendous opportunities which should encourage investments from some of the top companies in the UAE.
Another very promising avenue for investment with regard to Make in India initiative is Defence, a sector now open to 100 per cent foreign equity. India sees UAE as one of its main destinations for arms exports in the future. It would be a great idea for Indian companies to team up with UAE partners for joint exploration opportunities for manufacturing and building capabilities in defence vehicles, aviation and associated areas, defence equipment and armament manufacturing, defence electronics and MRO of military equipment/platforms.
While the strategic aspect of Indo-UAE energy ties concerning oil reserves is also expected to receive a boost in this round of dialogue between India and the UAE, we see lots of interest in renewable energy from sovereign wealth funds in the UAE. This is well-timed given that India plans to achieve 175 GW of renewable energy capacity by 2022 as part of its climate commitments and has thus got out of feed-in tariff and into competitive bidding. This is ideal for investors looking for transparent systems, according to Piyush Goyal, Minister for Power, Coal, Mines and New and Renewable energy who recently visited Abu Dhabi accompanied by a FICCI delegation. This industry initiative is expected to make the environment a lot more lucrative for potential players in the solar field.
With sustainable farm growth and food security gaining global currency, India and the UAE need to come together for promoting understanding of best agricultural practices in the two countries and boosting innovative techniques for increasing agricultural productivity. This will also ensure improved global market access.
Even as India and the UAE chart a roadmap of strategic engagement, FICCI which has been at the forefront of industry efforts to nurture the India-UAE relations, has identified some activities to deepen people-people to connect, a vital aspect of the relationship between our two pluralistic societies. This would be an excellent time to partner with UAE on initiatives to explore cooperation on women's empowerment as women in the UAE take impressive strides towards influencing cultural and economic advancements for their country with positions in government Cabinets, multinational boardrooms and as CEOs of their own startups, India and the UAE already have in place a Cultural Exchange Programme between India and UAE for 2016-2018, which aims to enhance cultural cooperation between the two countries in the media, radio, film, and television and FICCI could be an excellent partner.
Indeed, there is a lot that India and the UAE have on the table. The two Asian powers have all the reasons to take a quantum leap into the future to erect robust pillars of friendship.
(The writer is President, FICCI. Views expressed are strictly personal.)