In nearly 15 months since taking office, Prime Minister Narendra Modi has embarked on a frenetic spree of foreign outreach, but his visit to the UAE that starts on Sunday, is likely to be among the most important ones thus far.
The most noticeable aspect of this trip is the list of many ‘firsts’ associated with it. This will be the first time an Indian prime minister is visiting the Gulf nation since Indira Gandhi 34 years ago. This will also be Modi’s first foray into West Asia. And this will also be the first time he is travelling to an Islamic country as prime minister.
Incidentally, former prime minister Manmohan Singh was scheduled to make a trip to the UAE in 2013. However, it was scrapped after concerns grew that a landmark visit could be overshadowed by a potential diplomatic disaster. It was in July 2012, that an Indian fisherman was killed when his vessel was fired on by the US Naval Ship Rappahannock, off the coast of Dubai. The PMO decided that it was best to avoid choosing between souring the visit by raising the issue in the UAE, and appearing apathetic to the fisherman’s killing, thereby denying Singh the chance to reach out to Abu Dhabi.
Now, Modi will have the opportunity.
Five dimensions will feature heavily during the two-day visit: The diaspora, trade, energy, investment and security. In fact, Ministry of External Affairs (MEA) spokesperson Vikas Swarup almost said as much to The Hindu, stating, “Trade, investment, energy and Indian community will be the main focus of this visit”.
The UAE is home to an Indian expat population of around 2.6 million that sent home a reported $12.638 billion in remittances in 2014. The multi-faceted contribution of this community — comprising 30% of the UAE’s total population — to its host nation can be linked to its diverse demographic profile. According to the website of the Indian Embassy in Abu Dhabi, “65% belong to the blue-collar category… 20% belong to the white collar non-professional… 15% are professionals and businessmen and their family members”.
Efforts to engage with the diaspora were underway as soon as the visit was confirmed on Tuesday, with the announcement of what has become Modi’s signature public diplomacy event: A stadium address, this time at the 50,000-capacity Dubai International Cricket Stadium. And as any arena rocker worth his/her salt knows, you have to play your big hits. And so, Modi’s speech is unlikely to stray too far from his tried-and-tested formula of Indian unity and spirituality, Make in India, the government’s efforts to bring back black money, increase transparency and improve the ease of doing business in India, followed by a heartfelt plea to his audience to invest in India making up the solid crowd-pleasing set-closer. Public anticipation is palpably high, with over 45,000 registrations on a website set up for the 17 August event.
But before he steps up to the podium, he will hold high-level meetings with Vice-President and Ruler of Dubai Sheikh Mohammed bin Rashid, and Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces Sheikh Mohammed bin Zayed. High atop the agenda will be discussions on trade, energy and investment.
According to the MEA, India’s bilateral trade with the UAE (its third-largest trade partner) stood at $60 billion in 2014-15, a considerable drop from over $75 billion two years earlier, which is attributed to India’s curbing of gold imports. These meetings could give the trade relationship a new impetus, and re-energise negotiations for an India-Gulf Cooperation Council (GCC) Free Trade Area. India signed a Framework Agreement on Economic Cooperation with the GCC (which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE) over a decade ago, but a free trade agreement has yet to be concluded. Considering India imports 45 percent of its oil from GCC countries, wrapping up this deal should be a priority for the Modi government.
Which brings us neatly to energy — another theme that will feature extensively in discussions. To meet India’s growing energy demand, which increased by over 7 percent last year, Modi has been seeking to diversify the country’s import basket. However, the reality is that the GCC remains a critical source of crude oil and presently, Saudi Arabia accounts for the largest chunk of oil exports to India. This visit could enable an increase in the UAE’s share of Gulf energy exports to India.
The UAE’s investment in India is estimated to be around $8 billion at present (of which only $3 billion is FDI). Despite the signing of a Bilateral Investment Promotion and Protection Agreement in 2013, it has so far, for one reason or another, not been implemented effectively. Strategies for better implementation are expected, particularly since Modi will be eager to attract the attention of the Abu Dhabi Investment Authority, an $800-billion sovereign wealth fund designed to invest funds on behalf of the Government of the Emirate of Abu Dhabi.
Security is a topic that will inevitably come up in Modi’s meeting with Sheikh Mohammed bin Zayed given the rise of jihadi terror, particularly in West Asia. Also considering the Indian Navy’s contribution to anti-piracy patrols in the Gulf of Aden and its joint exercises with the navies of several Gulf nations, the likelihood of a security cooperation agreement being signed is high.
Lastly, it’s impossible to ignore the timing of this visit, which is sandwiched between Iran’s Foreign Minister Javad Zarif’s visit to India and Modi’s trip to Israel later this year. Following Iran’s apparent return from international isolation — marked by the signing of the Iran-P5+1 nuclear agreement), Modi will need to devote energy to maintaining India’s three-way balance between Iran, Israel and the Arab world (which has been so far neglected in the BJP’s foreign policy).
The efficacy of this balance of three important partners remains to be seen, but for now, we can expect an optically rich visit, high on photo ops, with the possibility of a few surprise ‘big-ticket’ announcements.
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Updated Date: Aug 16, 2015 16:42:42 IST