Need for expansion of Indo ME Techno-Economic relations
India has a good relationship with all ME countries with the United Arab Emirates topping the list. The bilateral relations that exist between the Republic of India and the United Arab Emirates since 3000 B.C, relations between India and the seven emirates which now make up the United Arab Emirates were traditionally close. The UAE and India had enjoyed close and friendly ties based on historic and cultural ties. People-to-people contacts and barter trade for clothes and spices from India in exchange for dates and pearls from the region have existed for centuries. After the creation of the Federation in 1971, India-UAE relations flourished. Today UAE and India share political, economical, and cultural links. There are over a million Indians in the United Arab Emirates, being by far the largest migrant group in the country. A large Indian expatriate community resides and engages in the UAE in economically productive activities and has played a significant role in the evolution of the UAE. However, many incidents concerning India’s expatriate workforce in the UAE, have caused friction in Indo-Emirati relations.
UAE and India enjoy historic ties with as many as 2.5 million Indian origin specialists in different sectors offering their services in this highly enlightened oil-rich gulf state. Indians also make up the largest ethnic group in the UAE making up roughly 27% of the total UAE’s residents. These economic migrants over the years have also made a significant economic contribution to India in the form of remittances worth billions of dollars.
The UAE has expressed its interest to invest in India’s growth including agriculture. Besides, the UAE, which is India’s top trading partner in the entire West Asia North Africa (WANA) region, alone represents 75% of India’s export to GCC nations with its exports to the UAE accounting for 6% of India’s global exports.
In the financial year 2018–19, India-UAE bilateral trade grew by over 20% to reach US$59.9 billion. India’s exports to UAE grew by 7% to US$30.13 billion whereas UAE’s exports to India surged by 37% to reach US$29.78 billion.
The World Economic Situation and Prospects (WESP) 2021 warns that the COVID-19 pandemic, which has delivered a heavy blow to economic activities worldwide, may exert devastating long-run socio-economic effects unless global policy responses can ensure a robust and sustainable recovery. Those actions should comprise smart investments in economic, societal, and climate resilience, revitalization of global trade, avoidance of premature austerity policies, and addressing widening inequalities.
India has been experiencing an economic crisis of historic proportions as a consequence of the pandemic. A large number of countries implemented widespread and rigorous lockdown measures in 2020 in order to contain the spread of the pandemic. This led to a virtual standstill in large parts of the economy. Businesses—especially small businesses with fewer financial reserves—were thrown into a liquidity crisis. After a respite during the summer and signs of economic revival, many countries, including France, Germany, Italy, and the United Kingdom, reintroduced various lockdown measures in the fourth quarter In response to the crisis, the countries enacted significant fiscal policy measures, including, among others, wage support schemes, liquidity assistance, and tax deferrals, with the size of those measures depending on the individual country’s fiscal position.
The UAE towards the other Middle Eastern countries seeks to encourage political and economic reform in each individual country in due respect for its specific features and regional cooperation among the countries of the region themselves and with India. Although the Middle East plays an important role in the region’s external policy, bilateral relations still form the basis for most of its diplomatic actions.
The “knowledge and skills gap” is a growing challenge in almost every part of the world. For business communities and recruitment companies in the Middle East, it is a stark fact of life. The skills gap could get a lot worse before it gets better, if at all. A report by the International Labor Organization (ILO) says that the global youth unemployment rate has risen between 1991 (9.3%) and 2018 (12.8%). In the Middle East, the rate has stood stubbornly at 26.1% — double that of the global average. Consequently, “disruptive technologies such as additive manufacturing, artificial intelligence, and blockchain” continue to collectively change what is needed in the workplace, resulting in an incompatibility between the skills demanded and those supplied.
The UAE also has a region-to-region relationship with the “Gulf Cooperation Council” (GCC) made up of Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia. Furthermore, there are also bilateral UAE-relations with Iran, Iraq, and Yemen. Both Middle East countries and the UAE require strong domestic technological bases to remain competitive. Options for bolstering these industries include talent exchanges, the facilitation of work permits for students and professionals, rules on reciprocal market access for businesses, joint innovation initiatives, and funding for joint research projects.
The UAE and ME now share a stronger political interest in shaping global norms and standards in the technological domain, including rules on information flows and the ethical application of technologies like facial recognition. The global dividing lines are epitomized especially by discussions on 5G and associated lock-ins on infrastructure, standards, security protocols, and the potential weaponization of technological interdependence. The UAE and other Middle East countries should seek out ways to converge technological safety protocols, privacy provisions, and investment screening approaches. The recognition of data protection equivalency would also enable data transfers that are necessary for the development of digital industries. It would also be prudent to jointly promote democratic principles through institutions like the Global Partnership on Artificial Intelligence and the D-10 (G-7 countries plus Australia, South Korea, and India, and other like-minded democracies) alliance, and by incentivizing supply chains that abide by shared standards.
To ameliorate supply chain concerns, the partnership should further develop the ICT and manufacturing sector in ME countries, enhance capacities for sourcing components and supporting technology, including for India’s two 5G frontrunners, strengthen governmental and industrial collaboration to advance and roll-out technologies, and adjust UAE-India trade policy to facilitate digital trade.
In the area of climate, India and ME countries should include the promotion and de-risking of investment in renewable energy and green technology, the channeling of post-COVID-19 stimulus into green infrastructure, joint research and development, and business-to-business cooperation to contribute to the green transition.
Importance of setting up a local partnership
There is a need for having local partners who are looking for Global expansion. The changing nature of the India–UAE development partnership calls for new ways of working together. Moving this partnership towards Middle East countries can use a broader range of forms of engagement to leverage additional finance, enable inclusive dialogue, and share expertise and knowledge in innovative ways. India and the UAE relationship can further develop their toolbox for cooperation in Middle East countries—including trade dialogue, financial cooperation, and peer-to-peer knowledge-sharing, triangular cooperation, and science and technology cooperation— to achieve their collective development ambitions in the next decade.
Set up an India–UAE Platform for sustainable economic growth around the neighboring countries rather than the only development cooperation in a narrow sense. Launch an India–UAE Connectivity Partnership to create synergies between UAE’s and the global countries’ emerging approaches to connectivity. Building on related aspects of their bilateral cooperation. g. energy connectivity and industrial corridors in India—the partnership can gradually shape a collective regional and Indo-UAE approach to connectivity. Establish an India–UAE Partnership could promote economic transformation, address key challenges of inclusive economic growth, industrialization, innovation, and employment, with a focus on women and youth in MEs. In addition to consolidating existing aspects of India–UAEcooperation, this partnership could set new priorities in neighboring countries, including education and skills in the digital transformation, social protection, and entrepreneurship and innovation. This partnership could engage ME development partnership and their applicability to different geographies and issues.
Bilateral relations focused on ME as a location for achieving global impact will remain the basis of the India-UAE development partnership. As a possible extension to the bilateral dimension, the India-UAE partnership to include cooperation with other ME countries, notably in UAE’s neighborhood and all other regions of Africa. Due to the Indo – UAE partnership, the UAE could engage in the development of industrial corridors with a focus on developing other countries in ME. The UAE could involve in infrastructure investment and assist in business development directly with ME partners. The Indo – UAEneed to show interest in promoting structural transformation in the context of its relations with ME countries and the debate about addressing the “root causes of irregular migration”.
Way forward. In the post-Covid scenario, there is a greater need for Trade and Industries to look for innovative ways to expand. Especially Indian enterprises, Educational institutions, IT, AI, IOT, and other developers and service providers are looking for opportunities and this Indo UAE Biz corridor offers quick and cost-effective expansion as a Gateway to ME and Western markets.
Dr. P. Sekhar,
Chairman, Unleashing India, Global Smart City Panel and MTGF
MBA Cornell Univ. Expert in ME and Director of DIHC promoted by Abu Dhabi Royal family