India, UAE ink pacts on energy security, defence but miss out on investment pact
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New Delhi: India and United Arab Emirates (UAE) on Wednesday signed as many as 14 bilateral agreements to deepen economic and strategic cooperation, including one to boost India’s energy security by establishing a framework for setting up a strategic reserve of crude by the Abu Dhabi National Oil Co.
In a sign of diversification and broad-basing of ties, both countries signed a pact on ramping up defence cooperation, including manufacturing and research and development, between public and private sector institutions of the two countries.
But an anticipated pact aiming to put together the administrative structure for the management of funds from the Abu Dhabi Investment Authority (ADIA) and India’s National Investment and Infrastructure Fund (NIIF) did not materialize. The pact was to pave the way for big-ticket investments into the Indian infrastructure sector which has an estimated capacity to absorb $1 trillion.
People familiar with the development said talks for setting up the framework to administer the fund were proceeding well with India identifying projects for investments when the funds start to flow in. ADIA is the sovereign wealth fund of the emirate of Abu Dhabi, which is one of the largest in the world. In 2015, the UAE agreed to invest as much as $75 billion in infrastructure projects in India during a visit by Prime Minister Narendra Modi. Both sides have been trying to work out the modalities to draw in the investments since then.
The pacts on Wednesday were signed after talks between Modi and the crown prince of Abu Dhabi, Mohammed bin Zayed al Nahyan, who is on a three-day visit to India. Prince Zayed is the chief guest at the Republic Day parade on Thursday. He is the third leader from the Gulf region to be invited to the Republic Day as chief guest. The others were then president Mohammed Khatami of Iran in 2003 and then Saudi Arabia monarch, King Abdullah, in 2006.
“This invitation (to the Republic Day parade) is a reflection of the special relationship that our two countries enjoy,” Prince Zayed said.
“Fostering our relationship with India is a strategic choice for the UAE,” he said, adding, “especially in light of our identical views on regional and international issues. No doubt, our Strategic Partnership Agreement will make our relationship stronger at the political, security and economic levels.”
In his comments to the media after talks with Prince Zayed, Modi described the UAE as one of India’s “most valued partners” and “a close friend in an important region of the world”. “I particularly welcome UAE’s interest in investing in India’s infrastructure sector. We are working to connect the institutional investors in UAE with our NIFF,” Modi said, adding, “we are also encouraging and facilitating business and industry of both countries to increase the quality and quantum of bilateral trade.”
On the pact for creating a strategic oil reserve, Modi said: “Our energy partnership is an important bridge in our linkages. It contributes to our energy security. His Highness and I discussed ways to transform our energy ties in a strategic direction through specific projects and proposals.”
The UAE is among the top five suppliers of fuel to India and Wednesday’s pact “aims to establish a framework for the storage of crude oil by Abu Dhabi National Oil Co. in India and to further strengthen the strategic relationship between the two countries in the field of energy,” an Indian statement said.
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Among the 14 agreements was a pact to enhance cooperation in the field of anti-dumping through exchange of information, capacity-building, seminars and training in mutually identified areas related to trade remedial measures.
On security and defence cooperation, Modi said this had “added growing new dimensions to our relationship. We have agreed to expand our useful cooperation in the field of defence to new areas including the maritime domain.”
“The MoU (agreement) on defence cooperation, will help steer our defence engagements in the right direction. We also feel that our growing engagement in countering violence and extremism is necessary for securing our societies,” Modi said.
A person familiar with the developments said counter-terrorism cooperation was an important item on the agenda of talks between Modi and Prince Zayed.
With five UAE diplomats being killed in a terrorist attack in Afghanistan’s Kandahar earlier this month, there seems to be a growing convergence of views on the subject of terrorism between India and the UAE—once seen as a close ally of Pakistan.