The United Arab Emirates is trying to polish its credentials as a global hub for business and finance in the face of growing regional competition from Saudi Arabia.
The United Arab Emirates and India aim to more than double non-oil trade to at least $100 billion in five years, while the Arab Gulf state works to deepen ties with fast-growing economies outside the Middle East.
The two governments plan to begin talks on an economic pact aimed at boosting business, investment and jobs, UAE Foreign Trade Minister Thani Al Zeyoudi said during a visit to New Delhi for talks with the Indian Minister of Commerce, Piyush Goyal.
“Both sides have set a very aggressive and ambitious timetable and aim to complete negotiations by December 2021,” Goyal said at a news conference on Wednesday. “We hope to sign formal agreements in early 2022.”
The UAE is trying to polish its credentials as a global hub for business and finance in the face of growing regional competition from Saudi Arabia. Earlier this month, the government said it was working on comprehensive economic agreements with countries with high growth potential, mainly in Asia and Africa. Last week it said it plans to invest up to $14 billion in Britain.
India is seeking better trade ties to revive its economy after a deadly second wave of the pandemic this year. The country is already the UAE’s second largest trading partner, with about $40 billion worth of non-oil trade before the pandemic hit. The UAE says bilateral trade could reach $100 billion in the five years after the pact was agreed and Goyal said the target could be revised upwards.
Indian nationals make up one of the largest populations in the oil-rich UAE, a major source of foreign remittances. India is also an important market for the UAE, Emirates and Etihad airlines. On a political level, the UAE royal family helped spark talks between India and Pakistan earlier this year.
Zeyoudi said representatives from the UAE’s sovereign wealth funds – some of the world’s largest – will be part of a delegation that will meet with Goyal next week. A director of Abu Dhabi’s state oil company, Adnoc, is part of the delegation currently in India.
Earlier, Goyal said the countries will focus on sectors such as petrochemicals, textiles, jewelry, medical devices and fintech. Investments between the two countries are already flowing. With a view to food security, groups from the UAE, a desert country heavily dependent on imports, have pledged $7 billion in 2019 to establish a “food corridor” and invest in the Indian agriculture.
Abu Dhabi equity fund Mubadala invested $1.2 billion in Indian telecommunications provider Jio Platforms in June 2020, and India’s Reliance recently announced a $2 billion investment in Abu Dhabi’s TA’ZIZ Industrial Chemical Zone.
“The UAE will quickly enter into new strategic agreements to expand our market access and use trade as a key pillar in a new era of economic cooperation,” said Al Zeyoudi. “It will strengthen our position as a global gateway to Africa, Asia and Europe.”
As part of that push, the UAE concluded talks with Indonesia earlier this year, committing to invest as much as $10 billion in sectors ranging from energy, infrastructure and ports to tourism and agriculture.