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UAE-India ties receive boost with Indian President Pratibha Patil's state visit tomorrow

posted on 20/11/2010: 694 views

Indian President Pratibha Patil begins a state visit to UAE tomorrow Sunday.

The visit draws great importance as it is part of the efforts to strengthen bilateral relations between the two countries in economic, trade, labour, political and cultural avenues.

President H.H Sheikh Khalifa Bin Zayed Al Nahyan has always expressed his keenness to promote bilateral cooperation with India through mutual understanding and convergence in the views of both countries over issues of common concern.

The bilateral relations between the UAE and India enjoy power and strength as they based on historical roots and mutual interests and cooperation.

The visit by President Patil comes within the framework of mutual official visits by senior officials in both countries aimed to strengthen cooperation for the benefit of both countries.

This is the first visit by Pratibha Patil to UAE and comes after the visit to UAE by former president Abdul kalam earlier in 2003.

In March this year, H.H Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE and Ruler of Dubai paid an official visit to India and the talks with the senior officials focused on expanding economic cooperation between the two countries.

India's relations with the UAE and all the various countries in the region date back to the dawn of history as India and the UAE had set up trade relations before thousands of years and both countries featured significantly in the global maritime trade.

Over the past decades, the relations between UAE and India were further strengthened, thanks to the understanding and the convergence of political and economic interests shared between the two countries, as well as to the foreign policy orientations of the United Arab Emirates established by the late Sheikh Zayed bin Sultan Al Nahyan.

The great attention given to relations with India is clearly reflected in the historic visit by the late Sheikh Zayed bin Sultan Al Nahyan to India in January 1975, when he met with the ten Prime Minister late Mrs. Indira Gandhi, as well as with the President of India and other senior statesmen.

The visits between senior officials in both countries continued over the past decades. These included the visits by former Indian president Fakhruddin Ali Ahmed to the UAE in November 1976 and by Indian Prime minister Indira Gandhi in May 1981.

The late Indira Gandhi held important talks with the late Sheikh Zayed bin Sultan Al Nahyan.

These visits have shown the extent of convergence and understanding in the views and political attitudes between the two countries towards regional and international issues at the time, especially with regard to the situation in the Middle East, where both countries emphasized the need for Israel's withdrawal from all territories occupied in 1967 including the city of Jerusalem.

Both countries also emphasized the rights of the people of Palestine and especially the right to return and live in their homeland and establish their independent state.

Recently, India and the UAE agreed to boost their "deep-rooted relationship" and enhance ties in various spheres.

The Indian delegation led then by Vijaya Latha Reddy, secretary (east), ministry of external affairs met with Mohammed Gargash, UAE Minister of State for Foreign Affairs.

In statements following a meeting held by the UAE-India Political Consultation Committee in the UAE, Reddy said they discussed topics of mutual interest and ways to further relations and friendship.

Reddy also lauded the progress made by the UAE in all fields and praised the leadership of President Sheikh Khalifa bin Zayed Al Nahyan.

Later in June, UAE Minister of Economy Sultan Al-Mansouri and Indian Ambassador Lokesh Mysore Kapanaiah held a meeting in Dubai to discuss economic relations and investment incentives the UAE and India offer for attracting foreign capital.

In 2008, the UAE -India non-oil trade exchange reached US$ 32 billion to account for 15% of the UAE's total foreign trade, according to the Minister.

Al Mansouri urged Indian companies to seize investment opportunities and potentials the UAE offers in infrastructure and clean energy and invited both Emirati and Indian businessmen to exchange visits to closely explore means to seize these opportunities.

He noted that more than 105 Indian companies run investments in the UAE in addition to other hundreds companies operating in the UAE's free zones.

The minister lauded the Indian community as a major contributor to the comprehensive development in the UAE, forming an important part of various vital segments in the UAE. "The UAE wise leadership is always keen to secure a safe, attractive environment to the Indian community, allowing it to realize ambitions and successes,' he added.

Lat February, UAE Minister of Foreign Trade Sheikha Lubna Bint Khalid Al Qasimi opened a six-day promotional tour of commercial and investment opportunities in the UAE in the city of Mumbai, representing the second leg of an official Indian visit which started in New Delhi.

The UAE Ministry of Foreign Trade (MoFT) has been overseeing a tour of four Indian cities with the participation of 43 representatives from ministries, federal authorities, local government departments, and private companies.

Events included a joint forum with the Indian Chamber of Commerce and Industry held under the theme 'Why UAE?'.

In her opening speech, Sheikha Lubna emphasized the UAE's commitment to enhancing trade and economic ties with is partners, particularly India, based on the Emirates' policy of openness, trade liberalization, increased foreign investments, and expanded private-sector participation in development. These, she explained, are vital to expediting economic growth and strengthening the components of the overall development of the UAE in various sectors.

"We came to Mumbai to promote business partnerships and strategic relations between the UAE and India. We have developed these as a trade-oriented bilateral partnership; in fact, India is our top foreign commercial partner, while the UAE is India's main commercial ally in the Middle East, with non-oil trade exchange between our countries surpassing $32bn in 2008," Sheikha Lubna said.

The UAE Minister commented that the UAE is currently the most dynamic economy in the Middle East and is well-positioned within the global economy. She attributed this status to the Emirates' successful economic strategy, development policy, and comprehensive economic diversification, noting that initial estimates of non-oil contributions to the national GDP amounted to around 66% last year.

She pointed out that the UAE offers various trade and investment incentives for Indian and international companies, such as its close geographical location near European and emerging Asian markets; highly-competitive free zones that provide advanced services to investors; 100% transfer of capital and profits; diverse industries and non-oil sectors; highly-available raw materials; cheap energy sources; zero profit and personal income taxes; and other elements that make the business and work environment of the UAE one of the most competitive in the world.

Sheikha Lubna added that the UAE and India should benefit from expectations of economic recovery within the year, and continue reinforcing the bilateral trade, economic, business, and cultural ties that have been existing between the two countries for so long.

She explained that the UAE is the fastest-growing ICT-enabled country in the region, noting the local presence of several technology-based research centres and unique local skills that can facilitate potential partnerships and investments in research, development and product innovation. She added that the country also offers numerous investment prospects in renewable energy.

Al-Qasimi also commended the role of Mumbai in promoting trade, economic and investment relations between the UAE and India, especially as it is the trade and economic hub of India and one of the most attractive cities for diverse investment activity. She further stated that Mumbai helps facilitate smooth bilateral partnerships between local investors and their UAE counterparts.

Mohammed Sultan Al Owais, UAE Ambassador to India, explained that bilateral relations between UAE and India have reached an advanced level. He noted the diversity of investments of UAE companies in India and vice versa, referring to covered industries such as aluminium, energy, finance and telecommunications. He called on Indian companies to identify trade and business opportunities in the UAE and avail of the Emirates' various incentives.

Manea Al Suwaidi, a Director in MoFT, delivered a detailed presentation on UAE-India relations, the future vision of the UAE, and the existing investment opportunities under the title 'Why has the UAE come to India?'.

He explained that trade cooperation between the two countries has grown significantly, pointing out that the UAE's trade with India amounted to $32.1bn in 2008, accounting for 15% of total UAE foreign trade and rising 48% over the 2007 figure to make India its top international trade ally.

Al Suwaidi noted that India is also the UAE's top non-oil export partner, with sector exports growing at 49% in 2008 over the prior year. He added that India ranked second only to China in terms of value of imports at $16.9bn during the same year, at a growth rate of 38% over 2007. India also topped UAE re-exports, posting $10.4bn at a growth rate of 69%. He further noted that the UAE is India's second-largest trading partner in terms of non-oil exports after the United States, with figures increasing 9.4%.

Moreover, Al Suwaidi stated that the UAE is India's fourth trade partner after China, Saudi Arabia and the United States in terms of total value of imports, with imports from the country accounting for 5.1% of the global total. He also revealed that the UAE ranks 31st among the most competitive economies in the world, pointing out that the non-oil sector accounted for more than 63% of the national GDP in 2008 and rose to 66% in 2009.

Al Suwaidi further noted that the non-oil sector comprised more than 53% of total exports for 2008. He attributed the solid figures to government policies that have promoted economic and social development and have developed mechanisms for boosting competitiveness. He also referred to substantial and diverse market opportunities in renewable energy, tourism, transport, health, and education.

Last March, the UAE's MoFT announced that its trade office in India is now officially operational.

The step which was taken in coordination with the UAE Foreign Ministry is part of MoFT's strategy to further promote trade relations with the subcontinent, expand the UAE's foreign trade contribution to its GDP, preserve the country's trade interests as well as to increase the flow of foreign direct investments (FDI) into its domestic markets, according to Abdullah Ahmed Al-Saleh, the director-general of the MoFT. This follows the opening of similar offices in China, the United States, Switzerland and Germany.

"To further promote UAE exports and national products in international markets, MoFT assigned qualified employees to trade sections of a number of UAE embassies abroad as part of a plan to open official trade offices in countries such as Australia, Brazil, South Korea, Iran, Turkey, France, South Africa, United Kingdom, Canada and Singapore," Al-Saleh commented. He noted that the opening of the UAE Trade Office in India will contribute to stronger strategic partnership since the UAE which is now India's top trade partner in the Middle East whereas India is also UAE's first trade partner with two-way trade surging to AED 165 billion in 2009, up from AED 32 billion in 2008.

In coordination with the Foreign Ministry, Manea Al-Suwaidi assumed office as a commercial attach at the UAE Embassy in India. Al-Suwaidi holds a bachelor degree in applied sciences, has spent over one year at the Foreign Ministry as head of department and brings in over ten years of experience for governmental departments and private companies where he was involved in public relations, events management, crisis management and marketing.

The UAE's overseas representative trade offices are tasked with preparing reports on economic development in the UAE, giving proposals on furthering economic and trade relations with relevant countries, providing analyses of UAE economic data as well as initiating contacts with relevant authorities of respective countries.

The offices also provide UAE businessmen and investors with services, advice and data on commodities on trade regulations as well as promote investment opportunities provided by the UAE for foreign investors. Overseeing progress on the implementation of agreement between the UAE and other countries, coordinating the organization of trade fairs and exhibitions and initiating contacts with foreign officials, commercial attaches are also among the roles of overseas UAE trade offices.

A survey released earlier this year by MoFT on UAE's overseas investments revealed that the investments of a group of large UAE companies in India reached AED 5.7 billion up until the year 2009 accounting for 1.4% of the total foreign direct investments in India.

According to the survey, the UAE is the largest Arab country, and the 10th globally, in terms of the total FDI inflows into India. Globally, it comes after Mauritius, Singapore, the USA, the UK, Holland, Japan, Turkey, Germany, and France.

The report, which was conducted by the Analysis and Trade Information Department at MoFT, attributed this positive change to the big increase of 273% in the value of UAE non-oil exports that went up from AED 2.2 billion during the first quarter of 2009 to AED 8.4 billion, in addition to the increase in the value of India-bound re-exported UAE commodities by 162% , going up from AED 4.4 billion to AED 11.5 billion during the same comparison period.

MoFT's survey revealed a positive shift from a deficit during the first quarter of 2009 worth around AED 7.3 billion to a surplus, in the favour of the UAE , during the first quarter of 2010 worth AED 2.2 billion.

The figures of the two quarters show a growth by 83% in the size of non-oil foreign trade between both countries from AED 20.5 billion to AED 37.5 billion.

This reflect the strength of existing bilateral ties between the UAE and India and the strength of the UAE's economy and its development that are seen as a direct result of the implementation of the country's policy and strategy of increasing economic openness, and its execution and establishment of a free market policy, a diversified economy, and increasing the UAE's non-oil exports in order to increase their contribution to the GDP.

The report also shows that India is the UAE's largest trade partner, while the UAE is the number one trade partner for Indian exports, and the second largest trade partner in terms of Indian imports, coming in the second place after China.

The report expected the value of commercial exchange between both countries to reach AED 120 billion in 2010, up from AED 108 billion in 2009.

It predicted that the value of UAE investments in India will reach Dh6.9 billion by the year 2011. This was based on a survey of UAE investments abroad conducted by the foreign trade ministry that showed investments by UAE firms in India reached AED 5.7 billion.

It also said that the value of UAE investments in India, in light of the continuous development of economic and commercial ties between India and the UAE, will reach AED 6.9 billion by the year 2011.

The report also indicated that UAE investments in India have witnessed a steady increase over the past 10 years, from $1.6 million in 2000 to $257 million in 2008, reaching $629 million in 2009.

UAE investments in India were concentrated in five main economic sectors that took a 48.6% share ($705 million) of the total value of these investments.

The energy sector received 19.1% share of UAE investments in India (worth US$264 million), followed by the services sector at 9.3% (US$143 million), software products and construction at 7.8% (US$115 million) and 6.8% (US$99.2 million) respectively, while tourism and hotels came in 5th place at AED 5.6 (US$84 million). – Emirates News Agency, WAM


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