Parallels between India and United Arab Emirates

Article by Yashika Janaria | Graphic by Asmita Maurya Summer Research Intern 2024 India is a nation renowned for its diverse states and rich culture. It comprises 28 states and 8 union territories, making it quite a large country. When it comes to India's pre-independence era, the country was ruled by the British for 200 years, emerging as one united country only after colonial rule. In the Middle East sits the United Arab Emirates (UAE), sometimes just known as the Emirates. The UAE is mostly well-known for its enormous mineral and oil resources and is a wealthy nation with a strong sense of Arab culture.

India and the UAE both have had a significant impact on the Asian continent. Owing to historical ties between them, the Gulf state currently hosts almost two million Indian laborers, and there is noticeable social stratification in both nations. The people of India and the Emirates cherish their traditions and make an effort to incorporate them into their daily lives. Over the ages, the Emirates evolved alongside India, starting as a tiny tribal hamlet (Zahlan 17), and later emerging into a wealthy, unified state. Both have experienced the impact of British colonial rule, and have a common past.

People from the two nations have been trading commodities across the seas for decades, and international trade has gradually evolved into diplomatic ties. People have exchanged knowledge, traditions, customs, and recipes, and countless Indians have journeyed to reside in the United Arab Emirates. Because of their long-term international cohabitation, they now have a shared way of life. When it came to the pearling industry, trade between the two nations deteriorated throughout the nineteenth and twentieth centuries, in part because Indian authorities taxed pearls coming from the Emirates (RigiLadez and Khan 330). Still, due to their close economic ties, the two nations' relations are currently improving.

Collaboration in trade between India and the United Arab Emirates

The UAE has been a reliable trading partner with India since the start of international trade between the two countries. India makes up for 14% of the UAE's non-oil exports and 9% of its overall foreign trade, making it the country's second-largest trading partner, while the UAE is India’s third largest trade partner. Trade between India and the UAE grew from $ 180 million annually in the 1970s to $ 84.84 billion in FY23. Over the next five years, it is anticipated that the value of non-oil commerce between the UAE and India will surpass$ 100 billion. In 2022–2023, bilateral trade between the two countries accounted for$ 84.84 billion. The UAE has risen to become India's second-largest export destination and its third-largest commercial partner, behind the United States and China. With total foreign direct investment inflows of$16.67 billion between April 2000 and September 2023, the UAE ranks seventh among investors in India. 3.5 million Indians live in the United Arab Emirates (30% of the total population), meaning that the majority of foreign residents in the United Arab Emirates are Indian, and their remittances constitute a sizable portion of foreign income for India.

By 2030, it is anticipated that India and the United Arab Emirates would have $250 billion in bilateral commerce. The Free Trade Agreement (FTA) between the two nations is anticipated to boost the UAE's GDP by$ 9 billion by 2030, according to the Minister of State for Foreign Trade. About$ 26 billion worth of Indian goods, subject to a 5% import charge, will gain from the CEPA agreement and contribute to an increase in investment flows, the creation of jobs, and ease of doing business in both countries. India and the United Arab Emirates, two of the biggest energy trading partners, are collaborating to develop their relationship and move toward a low-carbon future.

India and the United Arab Emirates have a shared history and close commercial connections. Nevertheless, they are very different from one another. The patriarchal nature of Emirati society is highlighted by the population's majority of men, and its government’s policies that favour the male population. Emirati culture has been influenced by the traditions and practices of numerous other nations since it was formed by a small tribal community. In contrast, for many millennia, India has followed the norms and regulations of Hinduism, though this religious difference seems to not have had major tensions, as both countries continue to expand trade. The manufacturing of commodities and software solutions powers India's economy, whereas oil and tourism are the main drivers of the Emirati economy. 

An Analysis of Bilateral Trade between India and UAE

We can conclude from the trade analysis above that India and the UAE are working hard to expand their economic and commercial ties to new heights, and it is expected that commercial and economic ties between the two countries will keep expanding following Prime Minister Modi's recent visit to the country, during which both sides committed to boost bilateral trade by 60% over the following five years.

Recent bilateral meetings and a significant agreement between India and the UAE are anticipated to strengthen trade ties between the two countries, which is advantageous to both.

The two countries, however, need to address the issues highlighted to raise bilateral trade between India and the Emirates to unprecedented levels. Last but not least, in order to strengthen their trading relationship and serve their shared interests, both nations should reassess their current trade regulations.

References: 

1. John, Issac, “India to re-emerge as UAE's top trade partner: HSBC” – Associate Business Editor. 

2. “India's third largest trading partner Relationship flourished since the creation of UAE.” Emirates 24/7 news. 11/02/2016

3. “India-UAE Trade.” Indian Brand Equity Foundation