PM Modi’s State Visit to UAE

What’s in today’s article?

• Why in news?
• India – UAE Bilateral Relationship
• Political relations between India and UAE
• Trade Relation between India and UAE
• Comprehensive Economic Partnership Agreement (CEPA) between India and UAE
• Investment between India and UAE
• NRI Remittances from UAE to India
• Energy Cooperation between India and UAE
• News Summary: PM Modi’s State Visit to UAE
• Key highlights of the visit

 

Why in news?

• After concluding his visit to France, the Prime Minister Modi departed for UAE and reached there on 15th of July.
• This was his fifth visit to the UAE since he assumed office in 2014.

 

India – UAE Bilateral Relationship

Political relations between India and UAE

• 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'.
  • Crown Prince of UAE visited India for the second time in January 2017 as the Chief Guest at India’s Republic Day celebrations.
• 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 is the guest country at G-20, being held under India’s presidency.

 

Trade Relation between India and UAE

• India-UAE trade rose to USD 85 billion in 2022, making the UAE India’s third-largest trading partner for 2022-23 and India’s second-largest export destination. 
  • India is the UAE’s second largest trading partner.
• Both the countries are expecting to achieve the target of USD 100 billion in trade before the G-20 meeting in Delhi in September 2023.

 

Comprehensive Economic Partnership Agreement (CEPA) between India and UAE

• India-UAE CEPA was signed on 18 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 between India and UAE

• 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.
• In the last fiscal, FDI from the UAE to India jumped over three-fold to $3.35 billion from $1.03 billion in 2021-22.

 

NRI Remittances from UAE to India

• The annual remittances made by the large Indian community in UAE (estimated to be around 3.3 million) amount to US$ 17.56 billion for year 2018.

 

Energy Cooperation between India and UAE

• 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.

 

News Summary: PM Modi’s State Visit to UAE

• Prime Minister Modi held talks with UAE President Sheikh Mohamed bin Zayed Al Nahyan to further deepen the multifaceted bilateral ties.

 

Key highlights of the visit

• Trade settlement in local currencies
  • India and the United Arab Emirates have 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.
    • The MoU aims to put in place a Local Currency Settlement System (LCSS) to promote the use of INR and AED bilaterally.
    • Creation of the LCSS would enable exporters and importers to invoice and pay in their respective domestic currencies.
    • This in turn would enable the development of an INR-AED foreign exchange market.
    • The use of local currencies would optimise transaction costs and settlement time for transactions, including for remittances from Indians residing in UAE.
• Linking of Fast Payment Systems of both the countries
  • India and the UAE agreed to link the Indian Unified Payments Interface with the Gulf country's Instant Payment Platform (IPP).
  • In this regard, RBI and the Central Bank of the UAE signed MoU for cooperation for interlinking their payment and messaging systems.
• IIT Delhi to open campus in Abu Dhabi
  • India signs MoU with Education and Knowledge dept of Abu Dhabi for setting up IIT Delhi campus there.
• India’s full support for UAE’s COP-28 presidency
  • PM Modi assured India’s full support for UAE’s COP-28 presidency.
    • The 2023 United Nations Climate Change Conference or Conference of the Parties of the UNFCCC, more commonly referred to as COP28, will be held from November 30 until December 12 at the Expo City, Dubai.
• Joint Statements issued
  • A Joint Statement was issued after the meeting. 
  • A separate Joint Statement on Climate Change was also issued.
    • In a joint statement on climate change, India and the UAE highlighted the importance of the global stocktake of collective action to achieve the goals of the Paris Agreement.
    • Both sides also said that there was an urgent need for developed countries to fulfil the USD 100 billion delivery plan to mitigate and adapt to the effects of climate change.

 

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Q1) What is UNFCCC?

The UNFCCC stands for the United Nations Framework Convention on Climate Change. It is an international environmental treaty that was adopted at the Earth Summit in Rio de Janeiro, Brazil, in 1992. The UNFCCC aims to address global climate change and its impacts by promoting cooperation among countries. The ultimate objective of the UNFCCC is to stabilize greenhouse gas concentrations in the atmosphere at a level that will prevent dangerous human interference with the climate system. It recognizes that climate change is a global issue and that its effects are felt by countries worldwide, but the responsibility for addressing it differs between developed and developing countries.

 

Q2) What is Indian Strategic Petroleum Reserves Ltd. (ISPRL)? 

Indian Strategic Petroleum Reserves Ltd. (ISPRL) is a special purpose vehicle (SPV) established by the Government of India under the Ministry of Petroleum and Natural Gas. It is responsible for building and maintaining strategic petroleum reserves (SPRs) in India. The primary objective of ISPRL is to ensure energy security and to mitigate any potential disruptions in oil supplies. India, as one of the world's largest consumers of oil, recognizes the importance of having strategic reserves to safeguard against supply disruptions caused by geopolitical events, natural disasters, or any other emergencies that may impact oil availability.

 

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Source: India, UAE sign pacts on use of local currencies in cross-border transactions, IIT campus in Abu Dhabi | Ministry of External Affairs | PIB | The Hindu | Indian Express