Bridge to the Emirates

Aug 18, 2015, 07:48 IST | Manoj Joshi

By now we are quite familiar with Prime Minister Narendra Modi’s foreign policy style. It certainly consists of substance, but it is accompanied by a lot of hype, chutzpah and ad hominem attacks on the Opposition back home. And so it has been with his visit to the United Arab Emirates, the first by an Indian PM in 34 years.

Modi was right to chide his predecessors when he pointed out that though there were 700 flights between India and the region in a week, it had taken so long for an Indian PM to visit the Emirates. Looked at any way, the UAE is one of the most important foreign relationships for India. Through the web of aviation links, trade and expatriate Indians, the UAE is virtually a neighbour of India.

The sight of the PM taking selfies outside the Sheikh Zayed mosque was no doubt aimed at signalling that he runs a government committed to maintaining communal harmony, notwithstanding the party he represents. Pic/PTIThe sight of the PM taking selfies outside the Sheikh Zayed mosque was no doubt aimed at signalling that he runs a government committed to maintaining communal harmony, notwithstanding the party he represents. Pic/PTI

Characteristic of the Modi style, the visit to UAE was carefully nuanced with the agenda back home. A direct connect with the Indian community has been worked through the Maharba NaMo meet on Monday night which will be as much a festival as a political rally. Another interesting move was the visit to the main mosque in Abu Dhabi on Sunday. Pictures of the PM taking selfies outside the Sheikh Zayed mosque were splashed across newspapers in the country and were no doubt aimed at signalling that he runs a government which is committed to maintaining communal harmony, notwithstanding the party and movement he represents.

According to official figures, in 2014-15, the UAE was India’s third largest trading partner, after China and the US, with annual trade topping $60 billion. In the same period, it was also the second largest export destination with $33 billion of our exports destined for the UAE. Petroleum and petroleum products form a significant proportion of the two-way trade, and it is the sixth largest source of crude for India.

Second, the UAE is the home of the 2.6 million-strong Indian community, the largest group of expatriates within the UAE. Among them are doctors, engineers, shop assistants, accountants, etc., who annually remit some $15 billion to the country.

Third, and this is what Modi is seeking from the country, it is a potential source of FDI for India. As of now the total of UAE origin FDI is a modest $3 billion, but New Delhi is eyeing its several sovereign wealth funds whose assets exceed $1 trillion. In fact, in his typical over-the-top style, Modi has sought $1 trillion worth of investments from the UAE. The ambitious Emirates, which are already planning a post-oil economy, are also an important destination for Indian investment and professionals.

Fourth, given its strategic location, underscored by its emergence as a global aviation and commerce hub, the UAE not only plays a vital role in our bilateral relations, but also our ties with the rest of the Persian Gulf region, arguably the most important external region for the country. With the US-Iran nuclear deal, the importance of the Emirates is set to grow as its port of Dubai is a major connector to Iran’s principal gateway — Bandar Abbas.

Fifth, UAE has an important role in our security. It is not just about our oil supply lines and expatriate population. The UAE is an important partner in our efforts to combat organised crime, smuggling and, most important, counter-terrorism. Since 2011, the two countries are bound by an agreement on security cooperation which provides for cooperation between them.

In all this it is clear that India has not been quite successful in wooing UAE investment. For that reason Modi went out of his way to woo investors at a meeting in Masdar City near Abu Dhabi. However, investors there, like those elsewhere remain unconvinced that India is ready, in terms of policies and performance, to welcome large investments. Gulf investors, in particular, have had problems in the past in relation to taxation and policy related issues. The shadow of the UAE’s failed investment in Etisalat mobile company, a casualty of the 2G scam, remains. However, Modi assured them in a comment that drew negative responses from the Congress party, that “the indecisiveness and lethargy” of past governments was over.

In 2013 and 2014, the UAE deported two persons and Abdul Sattar and Faizan Ahmad, allegedly linked to the Indian Mujahideen. But while they have been willing to give up Indian terror suspects, they are less cooperative on issues relating to Pakistan, whose clandestine services use the Emirates as a gateway to push illegal currency and money to terrorists in India.

We are even now not clear as to the suddenness of the tour which is uncharacteristically focused on just one country. There is also the question of the protocol, since his formal invite was from the Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed, not its president, Sheikh Khalifa his elder half-brother, or the ruler of Dubai Sheikh Mohammed bin Rashid, the vice-president and prime minister. Perhaps, it is to offset the impact of his expected visit to Israel later this year.

The writer is a Distinguished Fellow, Observer Research Foundation, New Delhi

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