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1. Introduction and Historical Perspective of India-UAE
Friendship
The friendship of India & UAE is one which goes back many decades ago. While they have
been trading partners since the early 1950s and 1960s, the influence of the migration or the
diaspora community has been highly influential in sustaining these relations. There are
several industries in India which have seen an active investment from UAE based companies
such as Emaar Properties and Emirates Holdings who see India as an immense opportunity
in the near future. The root of these relations has been trading agreements as well as
various Memorandum of Understanding or MOUSs which have been signed by both nation’s
ministers, various departments and also the major companies operating in both the nations.
One such example is the new Gulf policy that they share under the “Extended Neighborhood
Policy” which have laid the foundations for a more robust relationship between the nations
due to the common economic and geopolitical outlooks.
Delving into the historical perspective of trade between these two vast nations, the starting
these relations can be attributedtothe discoveryof oil inUAE in1962 whichstartedthe oil boom
inUAE. This wasthe turningpointintheirrelationshipasitactedas an incentive forIndiaaswell as
UAE to grow theirrelationsandmake use of eachother’sresources.Thiscanbe shownfromthe
data providedbythe Embassyof India,UAE whichshowsthatthe trade at that time wasvaluedat
around$180 Millionperannumwhich isconsideredaweakengagement.Onthe contrary,Indiahad
betterandbiggerrelationswithRussiaaswell asUSA at that time.
But a huge boomcame inthe tradingaffairsbetweenthe twonationspostthe 1990s due to the
thenPrime Ministerof India,Mr.NarasimhaRao whointroducedliberal policiesintothe foldinabid
to maintainstable relationsbetweenIndiaandUAE.One such example depictingthisisthe
introductionof the ‘Double TaxationAvoidance Agreement’whichwassignedbyboththe nations
Ministryof Finance ina bidto allowfree flow of goodstoand fromthe countries.Thisledtoan
increase inthe trade relationsbetweenthe twonationswhichisevidentfromthe International
MonetaryFund Directionof Trade StatisticsReportwhichdepictsthatthe IndianExportstothe UAE
had increasedfrom$455 Millionin1990 to US$1,287 Millionin1998 and vice versa.
Presently,UAEisIndia’sthirdlargesttradingpartner.Accordingtothe reportof the Director-General
of Commercial Intelligence andStatistics,there hasbeenanincrease of 20.09% in the trade between
the two countries.There are manyreasonswhichcontributestothe above-mentionedfactsuchas
the 2012 CustomsCooperationAgreementwhichwasaimedatreducingthe customdutieslevied
and thusmake the trade relationsrelativelyeasier thusencouragingFDIs.Due tothe increasing
friendship,relationshipandknowingwhatthese countriescandofor eachother, Shri Narendra
Modi visitedUAEinAugust2015, establishingthe UAE-IndiaInfrastructure InvestmentFundwhich
soughtthe Investmentof UAEin Indiatodevelopthe roads,railways,ports,andotherinfrastructure
inIndiaand became a cornerstone fortheirrelationship.If one talksaboutthe exportandimport
betweenthe two nations, the majorimportsthatIndiadoeswithUAE iscrude oil, whichisvaluedat
around$9512.48 MillionmakingUAEthe fifthlargestsource of crude oil forIndia.Onthe exports
side,Indiaisexportingpreciousmetals,petroleumproducts,fooditems,andalsoequipment.

2. Both the countrieshave investedhighlyintoeachotherwithUAEinvestingaround$6.65 Billionin
varioussectorssuchas the service sector,maritime supportsector,powerandconstruction.A few
examplesare- The CochinSmartCity byDubai Holdings,Mixed-use ProjectinMadhyaPradesh,etc.
Indiahas comparativelylargerinvestmentsinthe countryvaluedataround$85 Billion.A major
chunkof these investmentsisinthe Special EconomicZonesof UAEalso knownasFree-trade zones
whichhas beenamajor contributorandreasonfor FDIsfrom IndiaintoUAE.What’s special about
these zonesisthattheyare specificallyallottedspecial economiczonessetupwiththe objective of
offeringtax concessionsandcustomsdutybenefitstoemigrantinvestors.Some of the major
investmentsinUAEare- The BITS Pilani campuswhichlookstoencourage studentsfromIndiato
come to UAE foracademicsand inturn bringa surge in the studentexchange programs.Onthe
commercial side of business,Zee Entertainmenthasopenedupone of itsmainofficesinone of
these zonesaswell asApolloTyreshavingofficesall overUAEwhichhascontributedmajorlytotheir
profitmargins.There have alsobeenpartnershipssuchasthe one betweenJetAirwaysandEtihad
airwayswhichwasmade use of duringthe Covid-19pandemic.