Analysis - Political Transformations

Strategic Interests

Pillars of Stronger UAE-India Partnership

Tuesday، February 09، 2016
Strategic Interests

In the context of fast-paced growing relations between the UAE and India, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, H.H. Sheikh Mohamed bin Zayed Al Nahyan, led a high-powered delegation of ministers and senior officials on a three-day visit to India between February 10-12 to discuss a number of political and economic issues of mutual concern for the UAE and India.

It was one in a series of mutual and successful high-level visits by officials from the two states. During a visit to the UAE in August 2015 by Indian Prime Minister Narendra Modi, the two countries agreed  to coordinate their efforts in countering extremism, increase their trade and bolster their energy partnership, and cooperation in technology and space science to elevate their relations to strategic levels.

Drivers of growing UAE-India relations

The various motives for deepening political, economic and security relations between the UAE and India include regional variables and the nature of the common interests of both countries. The UAE seeks to coordinate with India as a rising regional power combating extremism and terrorism, particularly in light of the growing threat of ISIS. It also seeks to bolster its trade and economic relations with India and increase the chances for mutual investments based on the fact that the UAE is India's top trading partner, with trade exchange between the two countries amounting to US$60 billion in 2015. Furthermore, the UAE is the largest Arab investor in India with US$8 billion concentrated  in sectors like petroleum products, construction, energy, metallurgical industries, services,  computer software and hardware.

New Delhi seeks to enhance security and military cooperation with the UAE in countering terrorism and combating maritime piracy, as well as securing its energy supplies (India imports two-thirds of its crude oil as it can only source 30% of its needs from the local market). New Delhi also strives to secure submarine communications and ensure that the UAE can accommodate some 2.3 million Indian workers in various professions. The large Indian community in the UAE sends  US$15 billion in remittances to India every year, contributing to India's  economic growth and accounting for 25 percent of the total US$60 billion in remittances from Indian expatriates worldwide. The number also accounts for half of the total amount of remittances sent by all Indians in the Arab Gulf region, according to figures released by the Indian Embassy in the UAE.

To highlight these mutual interests, the Indian ambassador to the UAE stated that during the visit of H.H. Sheikh Mohamed bin Zayed to India, several MOUs and agreements will be signed by the two countries.  These agreements and investments are most notably in the areas of infrastructure, renewable energy, combating terrorism and cyber crime, and a strategic project to store large amounts of UAE oil in India to secure oil supplies to the market. In addition, on February 12, Sheikh Mohamed bin Zayed visited Mumbai City, India's financial capital in which the UAE is the largest investor in seaports and infrastructure. This is part of Abu Dhabi's interest in investing in the non-oil sectors of promising economies like India.

How does India see its future relations with the UAE?

India seeks to build stronger relations with members of the Cooperation Council for Arab States of the Gulf (GCC). Publications of Indian-based think tanks, including the Institute for Defense Studies and Analyses (IDSA), reveal the outline of these future relations based on India's political understandings, strategic and security ties with GCC countries, in addition to growing economic relations and trade exchange through the following:

1. Enhanced security ties:  India's choices for strengthening its bilateral or multi-lateral partnerships with the GCC are represented by the following:

  • More effective role in defense cooperation: India may initiate a process to enhance its defense sector and expand its scope so as to include GCC countries willing to build a security partnership with the subcontinent.
  • Enhancing Joint Counter-terrorism Efforts: India has already signed security agreements with a number of countries in the region. Combating terrorism constitutes an essential part of these agreements, but the increasing danger of terrorist organizations may push New Delhi to expand the scope of such agreements to include all countries in the region. The new scope would include the exchange of information and extradition of criminals. New Delhi may also put forth an initiative to initiate a regional institution dedicated to combating terrorism under the auspices of the GCC.
  • Cooperation in Combating Piracy: India, which plays a role in the region's maritime security, may also seek to take more effective measures to counter piracy through territorial waters and securing offshore oil facilities.
  • Defining a Clear Role in Regional Security: New Delhi may initiate talks and dialogue on security with GCC countries to settle several regional issues, including a request to get "observer status" in the Gulf regional organization. It would also take the initiative and propose taking part in annual joint military exercises with the GCC's Peninsula Shield Force to counter common security threats in the region.

2. Taking new steps to bolster economic and trade relations. India recognizes its need for enhancing its energy security and attracting more investments from the Gulf region including the UAE. It also recognizes the economic diversification policies pursued by GCC countries, particularly the UAE. In this respect, India’s motives and thought processes are based on the following:

  • Attempting to Improve the Investment Climate to Attract More GCC Investments.
  • Enhancing non-oil trade using its experience in the SMEs (Small and medium-sized enterprises) to help GCC countries in diversifying their economies, especially  after the continuing collapse of oil prices.
  • New Delhi may also develop long-term plans to expand energy cooperation with GCC countries in a bid to secure its own future crude imports.
  • India may take strides to secure maritime transport routes and ensure energy supplies will not be interrupted. In this regard, India would make arrangements with all countries of the region, and may even request the initiation of a certain mechanism for annual dialogue to support cooperation on energy with GCC countries, and with Saudi Arabia and the UAE in particular.
  • In light of the UAE's economic diversification, India may attempt to export new and more professional workforce depending on any changes in the labor market and the sought-after jobs in the UAE.

In conclusion, relations between the UAE and India serve as an exemplary of excellent and outstanding ties. The recent visit of Abu Dhabi crown prince to India represents the outcome of fruitful efforts made by officials from both countries to chart a new path for a strategic partnership between the two countries in various spheres to counter challenges and reduce the risks threatening the security and stability of the region.

Keywords: UAESecurityEconomic TiesIndia