Context: Recently, India virtually hosted the eighth meeting of the India-UAE High Level Joint Task Force on Investments (“the Joint Task Force”).
Background

• The Joint Task Force was created in 2012 as a crucial forum for further deepening the already strong economic ties between the UAE and India.
• The mechanism has assumed greater importance as the two countries entrench the Comprehensive Strategic Partnership Agreement signed in January 2017.

The task force discussed upon the following

• The positive outcomes achieved by the Joint Task Force were discussed
• The India and UAE sectors with potential for economic growth were identified
• Both sides reviewed the existing UAE special desk (‘UAE Plus’) and the Fast Track Mechanism created in 2018 to facilitate investments and to resolve any challenges experienced by UAE investors in India.
• India and UAE are implementing a comprehensive strategic partnership agreement.
• In recognizing the critical importance of civil aviation to the economies of both States, both sides agreed that the two civil aviation authorities should continue to work together on a priority basis, for their mutual benefit, to ensure speedy normalization of air transport operations between the two countries.

Recent Development

• India and UAE recently strengthened their Defence Cooperation. This will help India achieve its target of 5 billion USD of defence exports in five years.
• The Abu Dhabi National Oil Company and Indian Strategic Petroleum Reserves Limited signed a Memorandum of Understanding to establish Strategic Petroleum Reserve in India.

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.

UAE and Belt Road Initiative

• The UAE has signed a trade deal of 3.4 billion USD in 2019. China is the second largest trading partner of UAE. UAE is the major gateway for Chinese exports to the middle east.

UAE and United States

• US is one of the closest allies of UAE. Both the countries are close friends. The US recently brokered the historic Abraham Accord between the UAE and Israel. With this, UAE became the first major Arab state to recognize Israel. After UAE, Bahrain recognized Israel.

UAE Oil Reserves

• UAE holds seventh largest crude oil reserves in the world. In November 2019, Abu Dhabi announced that it has discovered seven billion barrels of oil. This raised the crude oil reserves of UAE to 105 billion barrels.

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.