India and the UAE are expected to ink a ‘strategic agreement’ next month to elevate their relationship to a ‘comprehensive strategic partnership’, providing for greater cooperation in areas such as defence and security, and space.
The agreement will be inked in the presence of Sheikh Mohammed bin Zayed Al Nahyan, the Abu Dhabi crown prince and deputy supreme commander of the UAE Armed Forces, who will be the chief guest at India’s Republic Day celebrations.
Prime Minister Narendra Modi and the Abu Dhabi crown prince will also discuss expansion of economic engagement, particularly in the oil and renewable energy sector and increasing UAE’s investment in India. The two countries have also sought to promote strategic partnerships in the energy sector, including through UAE participation in India in the development of strategic petroleum reserves, upstream and downstream petroleum sectors.
Talking to FE, ambassador of UAE to India Dr Ahmed Al Banna said: “The draft of the ‘comprehensive strategic partnership’ agreement is expected to be finalised before the visit.” Once inked, this agreement in the presence of the leaders of both countries will see deeper collaboration in various sectors including aerospace, military diplomacy as well as nuclear power.
Referring to the announcement about the establishment of UAE-India Infrastructure Investment Fund with the aim to reach a target of $75 billion, Banna said: “A joint working group comprising the concerned representatives of both sides are working to finalise the structure, rules & regulations, exemption of taxation etc. Also, recently, a CEO was appointed to take care of the funds.”
The Indian government earlier this year cleared a memorandum of understanding (MoU) with the UAE to explore opportunities for mobilisation of up to $75-billion long-term investment in the National Investment and Infrastructure Fund (NIIF). This fund is supposed to support investment in India’s plans for rapid expansion of next-generation infrastructure, especially in railways, ports, roads, airports and industrial corridors and parks.
The UAE envoy said Dubai Holding’s Tecom Investments has invested in smart city Kochi in a joint venture with the Kerala government, which includes a 650,000-square foot IT tower. The design of smart city Kochi is based on the Dubai Internet City and Dubai Media City developments. Dubai Holding hopes to tap India’s burgeoning IT sector. “A lot of SMEs and MSMEs are looking at UAE as a gateway to MENA, GCC countries, East Africa, and the sub-Sahara region,” he added.
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UAE’s national oil company Adnoc has already agreed to store crude oil in India’s maiden strategic storage and give two-third of the oil to it for free. India is building underground storages at Visakhapatnam in Andhra Pradesh and Mangaluru and Padur in Karnataka to store about 5.3 million tonnes of crude oil.
Besides food security, the UAE is also keen to increase its import of food from India. Defence cooperation is also going to be discussed between leaders of the two nations. The annual bilateral trade between UAE and India is currently around $60 billion. India is UAE’s number one trading partner while the Gulf nation is India’s third largest trading partner after the US and China. UAE is also India’s second largest export destination.