UAE-India Ties Expand

Modi makes moves in the Middle East

In his second visit to the UAE as head of state, Narendra Modi leaves with a variety of major energy, finance, and defense agreements made, as well as a promise to complete the Emirates' first Hindu temple in Abu Dhabi by 2020.

India’s Prime Minister Narendra Modi speaks during the World Government Summit in Dubai, United Arab Emirates February 11, 2018. REUTERS/Christopher Pike

UAE-India commercial ties arguably represent the most important trade relationship in the Indian Ocean.

India is the UAE’s largest trading partner, and the UAE India’s third most important after China and the US.

As the top remitters in the world, Indians in the UAE sent USD12.5 billion back home in 2017. Though down from its peak of USD15 billion in 2014 on the eve of the oil crash, this figure still represents a huge chunk of total remittance flows, some USD62.7 billion, which collectively accounted for 2.7% of Indian GDP in 2016.

With 3.3 million Indians in the UAE, nearly three times the country’s native population of 1.4 million Emiratis, scarcely have two countries been more intertwined.

But Indian Prime Minister Narendra Modi’s two-day visit to the UAE this past weekend, his second since assuming office, sought to achieve just that.

Meeting with his counterpart Crown Prince Sheikh Mohammed bin Zayed Al Nahyan on Saturday, the two hashed out critical agreements on transport, energy, and finance that could define their burgeoning commercial ties for decades to come.

Building on the USD53 billion in bilateral trade they conducted in 2016-17 and the USD75 billion the UAE pledged to invest in Indian infrastructure following Modi’s first visit in 2015, the Abu Dhabi National Oil Company (ADNOC) granted a consortium of Indian companies a 40-year 10% stake in its Lower Zakum offshore oil concession worth USD600 million, the first Indian investment in the UAE’s upstream oil sector.

They also promised to implement a strategic oil storage deal first hashed out in 2017 in which ADNOC would supply six million barrels of oil to India’s Mangalore storage facility on the Indian Ocean, half the site’s capacity.

The world’s third-biggest consumer of oil, this is part of India’s larger plan to create nationwide emergency underground storage facilities capable of holding 36.9 million barrels, enough to meet the country’s needs for ten days (at 2016 levels).

In addition to agreeing to create a joint e-platform to combat labor malpractice and related disputes, the Bombay Stock Exchange and Abu Dhabi Securities Exchange also signed an MoU to boost cooperation between the countries’ financial services sectors.

Dubai’s state-owned DP World also signed an MoU with the government of Jammu and Kashmir to build a multi-modal logistics hub and park in Jammu. As the winter capital of India’s northernmost province of Jammu and Kashmir, which straddles the Pakistani border, the move has been interpreted by many as a quiet nod toward the Indian camp in its ongoing dispute with Islamabad over the hotly disputed Kashmiri question.
Strong bilateral ties are not made of cash, sweat, and regulations alone: they are cemented by the spirit and the sword.

In addition to agreeing to hold joint naval exercises—the first time in modern history the Indian Navy has been granted the right to enter UAE waters—Modi also announced the construction of Abu Dhabi’s first Hindu temple at Dubai’s World Government Summit on Sunday.

Speaking before hundreds of diplomats and Indian expats, he also laid the foundation stones of what will be the first traditional stone structure of its kind in the Emirates.

As such, it will fill a gaping hole in the spiritual life of the UAE’s 3.3 million Indians, most of whom are from the southern (Hindu-majority) states of Kerala and Tamil Nadu. To be completed by 2020, the temple will be hand-carved in India and assembled in Abu Dhabi on ten acres of land off the Abu Dhabi-Dubai highway, all donated by Crown Prince bin Zayed Al Nahyan.

In the words of the chief spokesperson of BAPS Swaminarayan Sanstha, the Hindu charity overseeing the temple’s construction, Sadhu Brahmaviharidas, “Especially in the 21st century, when the world is fragmenting for frivolous reasons, this timely noble gesture creates hope for unity in diversity. It reinforces the guiding vision of tolerance and harmony of the founding fathers of the UAE.”

Earlier that day Modi paid his respects at the Wahat Al Karama war memorial.

Preceded by his trip to the West Bank—the first time in history a sitting Indian prime minister has visited the occupied territories—and followed by a visit to Oman on Monday, where 800,000 Indians also live and work, it was Modi’s largest charm offensive in the Muslim world thus far.