Issue

Context:

• Recently Christian Michel, a British National, wanted in Agusta Westland Chopper scam, was extradited to India from Dubai.
• Deepak Talwar and Rajiv Saxena were also extradited to India from UAE. Rajiv Saxena is a co-accused in AgustaWestland Scam. Deepak Talwar is a lobbyist accused of economic offences in India.
• UAE offered to provide financial assistance to India during the Kerala floods in August last year.

About:

India-UAE relationship:

• UAE is India’s third largest foreign trading partner with bilateral trade at around 53 billion USD.
• India is UAE’s largest trading partner.
• UAE is the second largest export destination of Indian Goods and Services.
• Indians form the largest Foreign Diaspora in UAE with over 3 million people. It is also largest population of Indian expatriates anywhere in the world. They form the soft power of India and the most important element in bilateral relationship – people to people tie.
• UAE is one of the important crude oil suppliers to India and important for India’s energy security.

Recent Attainments:

• Crown Prince of Abu Dhabi Sheikh Mohamed bin Zayed Al Nahyan was the Chief Guest of 2017 Republic Day of India.
• India was designated as the Guest of Honour country at Abu Dhabi Music and Art festival 2018.
• India and UAE signed an MOU for cooperation in Africa.
• India UAE had their first bilateral Naval exercise in March 2018 named ‘Gulf Star 1’, which took place off the coast of Abu Dhabi.
• India UAE signed a currency swap agreement in December last year which will boast trade and economic relationship between two countries and reduce India’s dependence on US Dollar.
• Abu Dhabi National Oil Company (ADNOC) has signed agreement to explore storing Crude oil in Indian Strategic Reserve in Padur.
• ADNOC also filled up 1.5 million tonnes of crude oil in Mangalore strategic reserve, the only foreign and private player so far to have invested in storing in Indian strategic reserve.
• Abu Dhabi government allotted land for construction of first Hindu Temple in Abu Dhabi. There are two Hindu temples in UAE, both in Dubai.
• UAE and India signed an MOU in field of manpower exploring the possibility of linking their respective e-platforms for the benefit and welfare of Indian workers going to UAE.
• India and UAE is fast-tracking food corridor. This will entail investment by UAE in Indian agriculture sector benefitting farmers and creating additional jobs in food processing logistics etc. It will also help in food security for UAE.
• The UAE is one of the biggest overseas markets for Indian cinema apart from the UK and USA.

Why is relation with UAE important to India?

• UAE is geographically located at Strait of Hormuz. This is world’s most important oil artery and strategically important for India’s energy security.
• Over 3 million Indians live in UAE. This is the biggest Indian Diaspora anywhere in the world. They contribute to Indian economy through large remittances.
• Safety of Indians is priority of Indian government for which it needs support of UAE government.
• UAE has one of the largest Sovereign Fund in the World. UAE wish to invest fund in India particularly in National Infrastructure and Investment fund (NIIF). India needs fund for its infrastructure sector.
• India needs UAE to contain Terrorism and Radicalization. UAE is influential nation in Middle East and Muslim World. Of the 24 extraditions from Middle East in last few years, 18 had been from UAE and Saudi Arabia.
• With US sanctions on Iran, India needs to import crude oil from other sources to meet its energy need. UAE and Saudi Arabia have offered India with additional crude oil supplies to meet India’s growing needs.
• UAE has a substantial influence over Pakistan. It deposited 3 billion USD in account of Pakistan’s central bank. India can use this influence to bring Pakistan to negotiating table for talks on terrorism and bilateral relations.
  

  Crisis in Middle East: War in Yemen for last 5 years, between government (backed by Saudi and UAE) and Houthi rebels (backed by Iran). This has created the largest humanitarian crisis in recent times. Diplomatic tensions between Qatar on one side and Saudi Arabia, UAE and Bahrain on other side. Qatar has recently left OPEC. There are nearly seven hundred thousand Indians living in Qatar. There has been escalation in tensions between Iran and other nations in the region. Murder of USA based Saudi journalist, Jamal Khashoggi, has again put spotlight on human rights violation and authoritarian regimes of the region.

  Tight Rope for India:

  • India has robust defence and energy ties with Qatar. Qatar is the largest long term Natural Gas exporter to India. With diplomatic relationship between Qatar and other countries in Middle East coming to a boil; and the former leaving OPEC recently, India will have to tread a very difficult line. UAE and other Gulf Cooperation Council countries have severed diplomatic ties with Qatar. Given India’s expanding economic political and strategic interests, it will have to engage more vigorously in developments of the region.
  • Deposit from UAE sovereign fund to State Bank of Pakistan shows that former’s relation with Pakistan are not based on India’s concerns only. While UAE envoy has clearly stated that UAE’s relation with India are not dictated based on third country, India needs to make sure that these funds are not used for anti-India activities.
  • India has strategic relations with Iran which is locked in a kind of existential battle with Saudi Arabia and UAE led Gulf Cooperation Council and USA. A World order where India cannot afford to choose sides, it has to walk on a very tightrope skillfully without a miss.
  • Recently, UAE hosted Taliban-US talks for political solution in Afghanistan. Though the talks have moved to Qatar, this indicates UAE still holds influence over Taliban. With USA, openly advocating its diminished role in Afghanistan and an eventual withdrawal of force, and Pakistan still trying to call shots, if India wants to protect its interest in Afghanistan, it has to coordinate with friendly countries like UAE.

   What lies ahead in India-UAE relation?

  • With India’s growing economic, political and strategic interests, it cannot stay aloof for long with current geopolitical environment in Middle East, whether it is war in Yemen to strained ties of UAE and others with Qatar and Iran. India will have to engage more vigorously with developments in the region.
  • Any kind of extended crisis in region will not just affect India’s energy security but also create insecurity among large Indian Diasporas. This has to be a priority for India’s foreign policy makers.
  • Indian Diasporas has been an important driver of UAE’s economy, from labour force to investments. India should use them as soft power for furthering Indian interests.
  • India UAE relationships are indeed going through golden phase but the former needs to maintain an incremental approach in furthering the interest of both. Short-term and long-term interest should form a proper mix in this approach. 

Learning Aid

Practice Question:

In the changing World order and constantly evolving geopolitical environment, can India afford not to choose sides while furthering its strategic interests?