Visit of the Crown Prince of Abu Dhabi to India

Why in the news?

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

What’s featured in today’s article?

• India-UAE Bilateral Relationship
• Key Highlights of the Visit

India-UAE Bilateral Relationship

• Political Relations:
  • India and the UAE established diplomatic relations in 1972, and their relationship has since grown significantly.
  • In January 2017, the two countries signed a Comprehensive Strategic Partnership Agreement.
  • The strong bilateral ties have been bolstered by high-level visits from both nations:
    • In February 2019, the UAE invited India as the “Guest of Honour” to address the Inaugural Plenary of the 46th Session of the Organisation of Islamic Cooperation.
    • Prime Minister Modi visited the UAE for the third time in August 2019, where he was awarded the UAE’s highest civilian honor, the ‘Order of Zayed.’
  • In April 2019, the foundation stone for the first traditional Hindu temple in Abu Dhabi was laid.
  • In February 2022, PM Modi and Crown Prince Sheikh Mohammed bin Zayed Al Nahyan held a Virtual Summit, issuing a Joint Vision Statement titled “Advancing the India and UAE Comprehensive Strategic Partnership: New Frontiers, New Milestones.”
  • The UAE was the guest country at the G-20 summit held under India’s presidency.
• Trade Relations:
  • India-UAE trade reached USD 85 billion in 2022-23, making the UAE India’s third-largest trading partner for that period, following China and the US.
  • Additionally, the UAE is India’s second-largest export destination (after the US), with exports amounting to nearly USD 31.61 billion in 2022-23.
• Comprehensive Economic Partnership Agreement (CEPA) Between India and UAE:
  • The India-UAE CEPA was signed in February 2022 in New Delhi during the India-UAE Virtual Summit.
  • This agreement encompasses nearly all tariff lines, covering 11,908 tariff lines from India and 7,581 tariff lines from the UAE.

Investment:

• Since the CEPA was signed, the UAE has become the fourth-largest investor in India for 2022-23, up from being the seventh-largest investor in 2021-22.
• The UAE has pledged to invest USD 75 billion in India’s infrastructure sector over time.
• The Abu Dhabi Investment Authority, the UAE’s primary Sovereign Wealth Fund, is a key investor in the National Infrastructure Investment Fund (NIIF), with a contribution of USD 1 billion.

Trade Settlement in Local Currencies:

• In July 2023, during PM Modi’s visit to Abu Dhabi, India and the UAE agreed to initiate trade settlements in their local currencies.
• An MoU was signed between the RBI and the UAE Central Bank to establish a framework for using local currencies in cross-border transactions.
  • This MoU establishes a Local Currency Settlement System (LCSS) to facilitate the bilateral use of INR and AED.

• Linking Fast Payment Systems:
  • In July 2023, India and the UAE agreed to connect India’s Unified Payments Interface with the UAE’s Instant Payment Platform (IPP).
• IIT Delhi Campus in Abu Dhabi:
  • In 2023, India signed an MoU with Abu Dhabi’s Education and Knowledge Department to establish an IIT Delhi campus in Abu Dhabi.
• NRI Remittances:
  • The large Indian community in the UAE contributes one of the highest annual remittance totals globally, accounting for 18% of all remittances to India (as of 2020-21 data).
• Energy Cooperation:
  • In 2017, the Abu Dhabi National Oil Company (ADNOC) and Indian Strategic Petroleum Reserves Ltd. (ISPRL) signed an MoU to establish a strategic crude oil reserve in Mangalore, Karnataka.
  • ADNOC is also exploring the option of storing its crude oil at ISPRL’s underground storage facility in Padur, Karnataka.
  • A consortium led by ONGC, including Indian Oil and Bharat PetroResources, has been awarded a 10% stake in the Lower Zakum Concession.
• Indian Community:
  • The Indian expatriate community, comprising around 3.5 million people, is the largest ethnic group in the UAE, accounting for approximately 35 per cent of the country’s population.
  • Approximately 35% of the Indian community consists of qualified professionals, businesspeople, and other white-collar workers.

Key Highlights of the Crown Prince of Abu Dhabi’s Visit to India:

• MoUs/Agreements Signed During the Visit:
  • MoU on Nuclear Cooperation: An agreement between Nuclear Power Corporation of India Limited (NPCIL) and Emirates Nuclear Energy Corporation (ENEC) aimed at enhancing collaboration on the Barakah Nuclear Power Plant’s operation and maintenance, sourcing nuclear goods and services from India, exploring mutual investment opportunities, and capacity building.

• • Long-Term LNG Supply Agreement: A contract between Abu Dhabi National Oil Company (ADNOC) and Indian Oil Corporation Limited for the supply of 1 million metric tonnes per annum (MMTPA) of LNG. This is the third such agreement signed in just over a year.

• • MoU Between ADNOC and India Strategic Petroleum Reserve Limited (ISPRL): This MoU focuses on exploring additional opportunities for crude storage in India and renewing their existing storage and management agreement. It builds on ADNOC’s current involvement in crude storage at ISPRL’s Mangalore Cavern since 2018. ISPRL, under the petroleum ministry, manages 5.33 million metric tonnes of strategic crude oil storage at Visakhapatnam, Mangalore, and Padur (near Udupi) in Karnataka.

• Production Concession Agreement for Abu Dhabi Onshore Block:

An agreement between Urja Bharat (a joint venture of IOCL and Bharat Petroresources Ltd) and ADNOC.

• • This is the first such agreement for any Indian company operating in the UAE, allowing Urja Bharat to bring crude oil to India, thereby supporting the country’s energy security.

• • MoU on Food Parks Development: An agreement between the Government of Gujarat and Abu Dhabi Developmental Holding Company PJSC (ADQ) focusing on the development of food parks in India, highlighting the expanding scope of India-UAE cooperation in both energy and food security.

Other Highlights:

• On September 10, a soft launch will occur for the India-UAE virtual trade corridor (VTC) and the MAITRI interface designed to support the VTC.

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