Complex Made Simple

Decoding of bilateral relations between UAE and India

The recent visit of Narendra Modi to UAE, the 3rd within five years, was to bolster the bilateral relations between the two countries. Indian Prime Minister called the UAE as a valuable partner to achieve India’s ambitious dream of $5 trillion economy by 2025 and termed the thawing relations as "at their best ever". Despite frequent visits by officials on both sides, prevailing commercial ties and personnel interaction between India and UAE deteriorated over the last five years. 

 

 

The recent visit of Narendra Modi to UAE, the 3rd within five years, was to bolster the bilateral relations between the two countries. Indian Prime Minister called the UAE as a valuable partner to achieve India’s ambitious dream of $5 trillion economy by 2025 and termed the thawing relations as “at their best ever”. Despite frequent visits by officials on both sides, prevailing commercial ties and personnel interaction between India and UAE deteriorated over the last five years. 

 

India is the second-largest trade partner of UAE after China, constituting 7.44% of overall trade during 2018. According to statistics released by the Indian Ministry of Commerce, India’s volume of trade with UAE stands at $55.66 billion, which includes $28.72 billion in exports and imports of $26.94 billion. UAE consistently ranked among the top 3 global partners of trade for India, constituting around 6.62% of India’s total trade and 35% of India’s trade with Arab countries. Around 8% of India’s crude oil was imported from the UAE for the aforementioned period. 

 

UAE trade with India has declined 25% from the year 2011 when UAE ranked the highest trading partner of India with $74 billion in trade volume as compared to $56 billion in 2018 when the UAE slipped to the third position.

 

The volume of bilateral investment of India with the UAE is $2.13billion that includes the inflow of $633 million and outflow of $1499 million in investments during 2018. 

 

The UAE is the sixth favourite country for India’s overseas investment while the Shree Cement, Reliance, Sterling and Wilson, Jindal and Zuari Infraworld are the top five investing Indian companies in UAE. 

 

In addition to commerce, the Indian diaspora is the largest foreign community in the UAE, fulfilling the requirement of the workforce for professional, skilled and semi-skilled labor to accomplish industrial and infrastructural projects. 

 

India has received $13.82 billion in remittances from UAE in 2017 that make up to 42% of the total UAE $32.97 billion remittance outflows. UAE remittances to India was $14.25 billion in the year 2011. 

 

The number of Indian emigrants outflow under ECR category halved from 224 thousand in the year 2014 to 112 thousand in 2018.

 

Indians are the largest foreign visiting community of Dubai. During 2018, out of a total of 15.93 million tourists in Dubai, 2.03 million were Indian but declined 2% from 2017. India received 67 thousand UAE tourists in 2017, only 0.67% of total tourist arrivals. A better visa policy from the Indian side can increase the number of Emirati tourists.  

 

Total air passengers between the UAE and India were 18.81 million during the financial year 2018-19. UAE’s main airlines Etihad and Emirates have a substantial share of air passengers from India. The share of UAE airlines and overall air passengers between the countries can increase manifold by adopting a liberalization policy in the allocation of flying rights and flexible policy for FDI in aviation.

 

Modi’s visit to the UAE can explore untapped potential areas of cooperation and investments in space research, technology, infrastructure, and real estate.      

 

 

Shafeeq Rahman, Ph.D., is a Delhi-based researcher. His data-driven articles are published in the Diplomat, Huffington Post, Middle East Monitor, DailyO, and many national and international publications. He has over a decade and a half research experience in data analysis.