Crown Prince of Abu Dhabi's Visit to India Strengthens Bilateral Ties

 What’s in today’s article?

• Why in News?
• India – UAE Bilateral Relationship
• Key highlights of the visit of the Crown Prince of Abu Dhabi to India

Why in News?

The Crown Prince of Abu Dhabi, Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, is on a two-day official visit to India. This is his first visit to India as the Crown Prince of Abu Dhabi.

India – UAE Bilateral Relationship

• Political relations
  • India and the UAE established diplomatic relations in 1972. Since then, their relationship has grown manifold.
  • In January 2017, India and UAE signed a Comprehensive Strategic Partnership Agreement.
  • The strong bilateral relations have received impetus from time-to-time with exchange of high-level visits from both sides.
    • In February 2019, UAE invited India as the "Guest of Honour” to address the Inaugural Plenary of 46th Session of the Organisation of Islamic Cooperation.
    • PM Modi paid his third visit to the UAE in August 2019. He was awarded the highest civilian award of UAE called 'Order of Zayed'.
  • The foundation stone laying ceremony for the first traditional Hindu Temple in Abu Dhabi was held in April 2019.
  • In February 2022, PM Modi and Crown Prince of Abu Dhabi HH Sheikh Mohammed bin Zayed Al Nahyan held a Virtual Summit. 
    • Both the leaders issued a Joint Vision Statement – “Advancing the India and UAE Comprehensive Strategic Partnership: New Frontiers, New Milestone”.
• UAE was the guest country at G-20, held under India’s presidency.
• Trade Relation
  • India-UAE trade rose to USD 85 billion in 2022-23, making the UAE India’s third-largest trading partner for 2022-23making UAE, India’s third largest trading partner for the year 2022-23 after China and US. 
    • Moreover, UAE is the second largest export destination of India (after the US) with an amount of nearly US$ 31.61 billion for the year 2022-23.
• Comprehensive Economic Partnership Agreement (CEPA) between India and UAE
  • India-UAE CEPA was signed in February 2022 in New Delhi during the India-UAE Virtual Summit.
  • In March 2022, India announced the unveiling of the CEPA with the UAE.
  • It covers almost all the tariff lines dealt in by India (11,908 tariff lines) and the UAE (7581 tariff lines) respectively.
• Investment
  • Since the signing of CEPA, UAE has emerged as the fourth largest investor in India during 2022-23. It was seventh largest investor in 2021-22.
  • UAE has committed to invest US$ 75 billion in India’s infrastructure sector over a period of time. 
  • Abu Dhabi Investment Authority, the principal Sovereign Wealth Fund of the UAE, is an anchor investor in NIIF Master Fund through an investment of US$ 1 billion in National Infrastructure Investment Fund (NIIF).
• Trade settlement in local currencies
  • In July 2023, during the visit of PM Modi to Abu Dhabi, both the countries agreed to start trade settlement in local currencies.
  • In this regard, an MoU between RBI and UAE Central Bank for the establishment of a framework to promote the use of local currencies (INR - AED) for cross-border transactions was signed.
    • This MoU puts in place a Local Currency Settlement System (LCSS) to promote the use of INR and AED bilaterally.
• Linking of Fast Payment Systems of both the countries
  • In July 2023, India and the UAE agreed to link the Indian Unified Payments Interface with the Gulf country's Instant Payment Platform (IPP).
• IIT Delhi to open campus in Abu Dhabi
  • In 2023, India had signed an MoU with Education and Knowledge dept of Abu Dhabi for setting up IIT Delhi campus there.
• NRI Remittances
  • The annual remittances made by the large Indian community in UAE is one of the highest in the world and is 18% of the total remittances to India [2020-21 data].
• Energy Cooperation
  • In 2017, the Abu Dhabi National Oil Company (ADNOC) and the Indian Strategic Petroleum Reserves Ltd. (ISPRL) signed an MoU to establish a strategic crude oil reserve in the city of Mangalore (Karnataka).
  • ADNOC is also involved in exploring the possibility of storing its crude oil at ISPRL’s underground oil storage facility at Padur in Karnataka.
  • A consortium led by ONGC including Indian Oil and Bharat PetroResources, has been awarded a 10 per cent stake in the Lower Zakum Concession.
• Indian Community
  • The Indian expatriate community of approximately 3.5 million is the largest ethnic community in UAE constituting roughly about 35 percent of the country’s population.
  • Around 35% of the Indian community is made up of professionally qualified personnel, businessmen & other white collar non-professionals.

Key highlights of the visit of the Crown Prince of Abu Dhabi to India

• MoUs/Agreements signed during the visit
  • MoU on Nuclear Cooperation between Nuclear Power Corporation of India Limited (NNPCIL) and Emirates Nuclear Energy Corporation (ENEC)
    • It is expected to enhance cooperation in the operation and maintenance of Barakah Nuclear Power Plant, sourcing of nuclear goods and services from India, exploring mutual investment opportunities and capacity building.
  • Agreement for long-term LNG supply between Abu Dhabi National Oil Company (ADNOC) and Indian Oil Corporation Limited
    • This agreement is for the supply of 1 million metric tonne per annum (MMTPA) LNG.
    • It is the third such contract signed in just over a year.
  • MoU between ADNOC and India Strategic Petroleum Reserve Limited (ISPRL)
    • It provides for exploring ADNOC's participation in additional opportunities for crude storage in India and the renewal of their storage and management agreement on mutually acceptable terms and conditions. 
    • This MoU builds on ADNOC’s existing involvement in crude storage at the Mangalore Cavern of ISPRL since 2018.
    • ISPRL is under the petroleum ministry and manages 5.33 million metric tonnes (MMT) of strategic crude oil storage in three locations — Visakhapatnam, Andhra Pradesh, and Mangalore and Padur (Near Udupi) in Karnataka.
  • Production Concession Agreement for Abu Dhabi Onshore Block 1 between Urja Bharat ((a JV of IOCL and Bharat Petro resources Ltd)) and ADNOC.
    • Such agreement is the first one for any Indian company operating in the UAE. 
    • The concession entitles Urja Bharat to bring crude oil to India, thus contributing towards the country’s energy security.
  • MoU between Government of Gujarat and Abu Dhabi Developmental Holding Company PJSC (ADQ) on food parks development in India.
    • This agreement underscores the expanding scope of India-UAE cooperation, focusing not only on energy security but also on food security.
  • Other highlights
    • A soft launch on the commencement of work on the India-UAE virtual trade corridor (VTC) and MAITRI interface to facilitate VTC will also take place on September 10.

Q.1. What were the main agreements signed during the Crown Prince's visit to India? 

Key agreements include an MoU on nuclear cooperation, a long-term LNG supply agreement, and a production concession for crude oil exploration, furthering energy ties between India and the UAE.

Q.2. How does the Crown Prince's visit impact India-UAE relations? 

The visit enhances bilateral relations by strengthening energy and trade cooperation, with agreements on nuclear energy, LNG supply, and a focus on infrastructure investment, solidifying the strategic partnership.

Source: Nuclear to LNG, India & UAE ink 4 key pacts to expand energy ties | MEA | Financial Express