India and the UAE
From Trading Ties to Strategic Partnership
As India seeks to cement its status as a leading world power and major emerging economy, the UAE’s significance as the commercial and logistical gateway to global trade and investments between Asia, Europe, Middle East and Africa could be key. For the well-informed investor, substantial opportunities exist to develop an India-UAE nexus, but associated risks must also be understood and managed effectively.
This partnership is being promoted at an official level. In January 2017, India and the UAE signed 14 memorandums of understanding (MoUs) during a state visit to India by Abu Dhabi Crown Prince Mohammed bin Zayed Al Nahyan. The MoUs, which cover a range of strategic areas including defence, infrastructure and energy cooperation, are intended to reinforce, deepen and formalise a significant bilateral relationship. India is already the second largest destination for UAE oil exports, while two-way trade between India and the UAE stood at USD59.6bn in 2015, a threefold increase from 2006. Indian Prime Minister Narendra Modi has forecast that it will reach USD100bn by 2020.
Strong Historic Ties
Modern-day ties between India and the UAE’s seven emirates (Abu Dhabi, Dubai, Ras al-Khaimah, Sharjah, Fujairah, Umm al-Quwayn and Ajman) have roots dating back centuries before the UAE’s formal establishment as a nation-state in 1971. Pearls, the emirates’ most valuable export prior to the discovery of oil in Abu Dhabi in the 1950s, were historically exported to India, with goods such as textiles and rice coming the other way.