An overview of the first to the UAE by an Indian Prime Minister for 34 years, what this means for companies in both countries and why the UAE-India relationship is crucial. For more information please contact our Abu Dhabi or Dubai offices. Abu Dhabi: www.brunswickgroup.com/contact-us/abu-dhabi/ Dubai: www.brunswickgroup.com/contact-us/dubai/

1. © Brunswick Group LLP 2015
September 2015
Modi visit to the UAE encourages new investment flows
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The visit to the UAE last week by Indian Prime Minister, Narendra Modi, was much more
than another courtesy call. It appears that a long history of de-facto economic links,
fostered through Indian migration to the UAE and hydrocarbon exports to India, is now
being formalised. This is an ambitious programme to ramp up two-way trade and
investment which may present considerable opportunity for companies in both countries.
The UAE visit was the latest in a series of high profile and smartly orchestrated trips which
has seen Modi take his charm offensive to the United States, Japan, China, Germany, Sri
Lanka, Iran, Kazakhstan, Qatar and Israel. Of his 27 international trips since assuming
office, most of them have been visits to Asian countries, underscoring his 'neighbourhood
first' approach to foreign relations.
But surprisingly, given the long history of Indian migration to the UAE, this was the first
visit to the country by an Indian prime minister for 34 years.
For the UAE, it marked the start of a considerable new engagement with West Asia. For
India, energy security is high on Modi’s agenda – the Gulf Cooperation Council (GCC)
countries supplies 45 percent of India’s oil imports – but the visit was also a crucial step in
a drive to attract the foreign investment needed to realise the Modi government' economic
ambitions.
In recognition of the importance of the visit, Modi was welcomed not only by Sheikh
Mohammed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi but also by senior
members of the ruling Al Nahyan family and by Sheikh Mohammed bin Rashid Al
Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.
A relationship upgrade based on economics
With no commercial deals signed during the visit, the main outcome was a joint statement,
which saw the bilateral relationship upgraded to the level of a “comprehensive strategic
partnership”.
This is an Indian foreign policy initiative that elevates the UAE in Indian diplomacy, and
reflects the role the country can play in India's wider engagement across Asia and the
Middle East. The UAE joins the likes of the United States, China, Uzbekistan, South Korea
and Iran as India’s key strategic partners.
The statement was clear recognition of the importance of the UAE-India commercial
corridor, which has seen bilateral trade between the two countries grow significantly over
the past half century, from $180 million per annum in the 1970s to around $60 billion
today. The UAE has become India's third-largest trading partner after China and the United
States.

2. © Brunswick Group LLP 2015
Much of the statement reflected the existing economic relationship. For example, it
pointed out that the UAE should benefit further from human resources from India to
develop expertise in sectors such as information technology, construction, transportation,
and services. It also recognised the positive role that Indian small and medium size
enterprises could play in private sector development in the UAE.
But there was also a strong emphasis on encouraging capital flows, particularly for the UAE
to invest in large Indian energy infrastructure projects, while facilitating the participation
of Indian companies in infrastructure development in the UAE. This was a theme that Modi
also took up in an address to investors at Masdar City, a centre for alternative and
sustainable energy in Abu Dhabi.
So what does this mean for companies in both the UAE and India? The clear message
coming through is that India is open for business and the UAE is in full support of this.
Major companies in the UAE, such as Emaar Properties, DP World, Abu Dhabi’s National
Petroleum Construction Company, Abu Dhabi National Energy Company and Abu Dhabi
Investment Authority already have large investment and operations in India. With Modi’s
clever marketing of India as an attractive business destination and improving investor
confidence in the region, it is likely that we will start to see more companies in the Gulf
following suit.
Modi summed up his visit in unequivocal terms: “There are no limits to our relationship. I
wish our friendship to deepen, and our relationship to broaden, and for India-UAE
relations to evolve into a strategic partnership.”
Also speaking to an Indian audience
This UAE visit and strengthening of economic ties is a welcome development for Modi at a
time when his government has recently faced delays in the approval of key policy reforms -
- in areas such as land ownership laws and tax -- due to parliamentary disruption by the
main opposition party.
The visit received widespread and largely positive media attention in both the UAE and
India. Modi's formula of well-choreographed set piece events, combined with focused
oratory and smart social media engagement (such as the selfie he took and posted of
himself and his hosts at Sheikh Zayed Grand mosque) helped ensure the messages that he
wanted to convey to international and domestic Indian audiences were impactful.
Modi ensured he was seen to be sensitive to the varied Indian population in the UAE –
which stands at an estimated 2.5 million or 30 per cent of the total population -- sending
home $13 billion annually in remittances.
Modi looked to dispel the impression held by many overseas Indians that he only looks
after the interests of the white collar community.
He ensured that labour rights were subtly put on the agenda by visiting a “labour camp”
housing Indian workers at the ICAD industrial zone in Abu Dhabi.
And some 40,000 UAE-based Indians – from across the social spectrum -- turned up at the
Dubai Cricket Stadium to give Modi an affectionate welcome, and to hear him speak about
a wide range of topics, from the India-UAE economic relationship to the threat of terrorism.
While he called Dubai “mini-India”, Modi reminded his audience that they should still
regard India as their home.