How bilateral ties between India and UAE have grown under PM Modi

In July 2022, after a successful visit to Germany, Prime Minister Narendra Modi decided to make a brief stopover in Abu Dhabi. Because of the short notice, officials at the Indian embassy in Abu Dhabi did not get enough time to prepare. But what surprised them was the decision by President Sheikh Mohamed bin Zayed Al Nahyan to receive Modi at the airport. The two leaders greeted each other with a hug, before heading out for a quick meeting. The same sequence of events was repeated in July 2023 as well, the only difference being Modi was returning from France this time.

Since he became prime minister in 2014, Modi has visited the UAE seven times, making it the most-visited country by the prime minister. The UAE is today India’s most notable partner in West Asia, and has established itself as an important connection between India and the region. There has been growth in the bilateral partnership since Modi became prime minister. When he went to the UAE for the first time, in August 2015, it was the first visit by an Indian prime minister in 34 years―the last was by Indira Gandhi in 1981.

The two countries have many common interests that they will pursue, keeping in mind the ground realities. The focus, in the coming days, will be to further expand the network of bilateral relationship that has been built up. A central reason for the UAE being India’s closest partner in West Asia is the 35 lakh-strong Indian community, which has been the most significant contributor to the UAE’s economy since the country was formed in 1971. Last year, India and the UAE completed 50 years of diplomatic relations.

V. Muraleedharan, Union minister of state for external affairs, said India and the UAE were bound by bonds that predate India’s independence, by values both countries cherish and by interests that they share. “Today, the UAE is India’s pre-eminent partner in the region in terms of both the strength and the breadth of our partnership. And it really extends to every aspect of human endeavour, whether it is food security, energy security, counter-terrorism or multilateral cooperation,” said Muraleedharan.

Sources in the ministry of external affairs said the bonhomie between Modi and Nahyan had been a key factor driving the relationship. “Their friendship has played a very important role in furthering the economic cooperation and mutual trust between the two nations,” said an official.

Not everyone agrees with the point, though. Former minister of state for external affairs Salman Khurshid, said that Modi’s friendship with the UAE president had nothing to do with the growth in bilateral ties. “If you look at [our ties with] Saudi Arabia, Qatar, Malaysia, or even the UAE, these are transactional ties that will become fragile if something goes wrong. Indira Gandhi enjoyed far better relations with leaders like Egypt’s [Gamal Abdel] Nasser. Those were genuine, close friendships. If one gives credit to friendship between two leaders for the wonderful ties between two countries, the leaders have to be made accountable for their actions [that hurt the relations] as well,” he said.

T.P. Sreenivasan, former ambassador and permanent representative of India to the United Nations, said India-UAE relations were an example of people-to-people ties leading to trust and cooperation between the two governments. “The centuries of interaction between the two civilisations have generated goodwill and faith, transcending religion. The mutualities came to the fore as Indians contributed to the building of the UAE, and the UAE reciprocated by establishing a strategic bond,” he said.

With strategic bond comes new paths of cooperation, which, in the case of the UAE and India, are across sectors―fintech, clean energy and climate action, food security, digital payments, investments, defence and cyber security. And now there is education. The Indian Institute of Technology Delhi campus in Abu Dhabi, which was announced some months ago, will function from an interim campus in Zayed University in Dubai. “The IIT [campus] will be set up in the UAE in two to three years. The aim is to attract the best minds from the UAE and from across the world,” said an official.

The UAE’s investments in India are mostly in sectors such as real estate, transport and warehousing and coal, oil and gas. Since the Comprehensive Economic Partnership Agreement (CEPA) between India and the UAE came into effect in 2022 there has been a 16 per cent increase in trade between the two countries, taking it to $84.84 billion. But what has caught the attention of the world is the memorandum of understanding between the Reserve Bank of India and the Central Bank of the UAE to push cross-border trade using the rupee and the dirham. This, experts said, could bolster the internationalisation of the rupee. It is also expected to boost bilateral trade and investments in the region and will also help optimise transaction costs for remittances from Indians. The National Payments Corporation of India (NPCI) is helping the UAE in developing the first national domestic card scheme (DCS) for the nation. “Once we implement the scheme, any Indian coming to the UAE with the RuPay card will be able to [use it to] pay seamlessly,” said Sunjay Sudhir, Indian ambassador to the UAE. “At the same time, any Emirati or a resident of the UAE with a credit or debit card from the DCS can make a seamless payment when they come to India,” he said.

The relationship between India and the UAE has been built on close cultural, economic and people-to-people ties between the nations. The setting up of the BAPS Swaminarayan Temple in Abu Dhabi is another example of the growing ties. The UAE government provided land free of cost for the temple. “People in the UAE know that India is a mosaic culture, with tolerance, inclusivity and diversity,” said an official at the Indian embassy in Abu Dhabi. “The UAE has always accepted people from all over the world. The message is not new. But messages need symbols. BAPS is one such symbol.”