India-UAE Relations: Strengthening Regional Connectivity and Economic Cooperation

15 Apr India-UAE Relations: Strengthening Regional Connectivity and Economic Cooperation

This article covers “Daily Current Affairs” and the Topic. India-UAE Relations: Strengthening Regional Connectivity and Economic Cooperation”

SYLLABUS MAPPING:

GS-2- International Relations-  India-UAE Relations: Strengthening Regional Connectivity and Economic Cooperation

FOR PRELIMS

What is CEPA? What challenges exist in India-UAE relations? How can they be addressed?

FOR MAINS

How can India and UAE work together to enhance defence and energy security?

Why in the News? 

His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Deputy Prime Minister and Minister of Defence of the UAE undertook his first official visit to India from 8–9 April 2025. He was received in New Delhi by Shri Suresh Gopi, Minister of State for Tourism and Petroleum and Natural Gas, and accorded a ceremonial Guard of Honour. During the visit, Prime Minister Shri Narendra Modi hosted a working lunch at his residence, where the two leaders discussed ways to deepen the India-UAE Comprehensive Strategic Partnership. The Crown Prince also gifted PM Modi a replica of his grandfather Sheikh Rashid’s traditional Bisht, symbolizing the enduring generational ties between the two nations.

Evolutions of India-UAE Bilateral Relations 

India UAE cooperations Horizons

1. Trade & Economy: CEPA boosts non-oil trade; initiatives like VTC Bharat Mart enhance logistics.
2. Energy: Strong ties in oil, gas, and renewables; collaboration on green hydrogen and strategic reserves.
3. Defence & Security: Joint exercises, counter-terrorism, maritime cooperation, defence manufacturing.
4. Education: IIT, IIM, IIFT campuses in UAE; student exchange, skill development collaborations.
5. Diaspora: 3.5M+ Indians in UAE; key role in economy; welfare via India-UAE Friendship Hospital.
6. Healthcare: Medical tourism, hospital tie-ups, pharma trade, and telemedicine cooperation.
7. Infrastructure & Connectivity: UAE investment in ports, logistics, IMEEC, and shipbuilding MoUs.
8. Digital & Tech: Cooperation in fintech, AI, DPI, cybersecurity, and startup ecosystem via I2U2

Siginifunace of UAE for India 

1. Top Trade Partner: UAE is India’s 3rd largest trading partner and 2nd largest export destination. The 2022 CEPA aims to boost non-oil trade to $100 billion, opening new markets for Indian goods and services.
2. Energy Security: A major supplier of crude oil and LPG to India. UAE has invested in Indian Strategic Petroleum Reserves and is partnering in renewable energy projects like green hydrogen and solar parks.
3. Indian Diaspora: Home to 3.5+ million Indians (the largest overseas Indian population). They contribute to the UAE’s economy and send back significant remittances, supporting India’s foreign exchange reserves.
4. Strategic Location: UAE’s position as a global logistics and shipping hub helps India enhance trade with West Asia, Africa, and Europe. It is a key partner in the India-Middle East-Europe Economic Corridor (IMEEC).
5. Defence & Security Cooperation: Regular joint military exercises (e.g., Desert Eagle), anti-terrorism coordination, cyber security, and maritime cooperation strengthen regional security and strategic trust.
6. Investment & Infrastructure: UAE invests in Indian ports, airports, logistics, and urban infrastructure. Projects like Bharat Mart and Virtual Trade Corridor are enhancing bilateral economic integration.
7. Support in Multilateral Platforms: UAE supports India’s positions in UN, FATF, and G20, and is a founding partner in I2U2. Both share a vision of a stable, rules-based global and regional order.
8. Education, Health & Innovation: Hosting IIT, IIM, and IIFT campuses, UAE is emerging as an education hub for the Indian diaspora. It is also collaborating with India in fintech, AI, telemedicine, and digital public infrastructure.

Areas of concern between India -UAE 

1. Labour Welfare and Workers’ Rights: Issues related to poor living conditions, wage delays, and legal protection for low-income Indian workers. Need for stronger bilateral labour agreements and grievance redressal systems.
2. Remittance Dependency & Economic Vulnerability: Economic downturns or policy changes in the UAE can impact remittance flows to India. Sectors like construction, where many Indians are employed, are vulnerable to global shocks.
3. Legal and Consular Issues: Indian nationals often face legal challenges, including arrests, without adequate legal aid. Consular access and timely support in such cases can be inconsistent.
4. Regulatory Hurdles in Trade & Investment: Despite CEPA, non-tariff barriers, customs delays, and regulatory mismatches can hinder trade efficiency. Alignment on standards and digital trade facilitation is still evolving.
5. Geopolitical Pressures & Strategic Balancing: UAE’s growing ties with China and Pakistan can be a concern for India’s strategic interests. India must balance UAE ties while safeguarding its core regional priorities.
6. Climate & Environmental Commitments: Need for alignment in climate action, especially on energy transition, sustainable development, and green hydrogen collaboration. Fossil-fuel dependency still dominates trade patterns.
7. Underutilized Sectors of Cooperation: Space, cyber-security, startups, and agriculture cooperation is under-leveraged. Greater focus is needed on expanding new-age and futuristic sectors.
8. Visa & Mobility Restrictions: Limited mobility of skilled professionals, entrepreneurs, and students due to restrictive visa policies. Challenges in mutual recognition of qualifications and work permits.

Way to further  the bilateral ties 

1. Deepen Trade & CEPA Utilization: Expand the product and service basket under CEPA. Fast-track initiatives like Bharat Mart, Virtual Trade Corridor, and IMEEC for seamless trade logistics.
2. Strengthen Labour & Diaspora Welfare: Enhance bilateral frameworks for labour rights, social security, skill mapping, and welfare schemes. Set up more grievance redressal and legal aid cells for Indian workers in the Gulf.
3. Boost Energy and Climate Cooperation: Joint ventures in green hydrogen, solar, wind, and carbon capture technologies. Collaborate on cleantech investments under I2U2 and COP28 follow-ups.
4. Enhance Defence & Security Partnership: Conduct more joint defence exercises, naval patrols, and cyber-security cooperation. Collaborate on defence manufacturing and maritime domain awareness in the Indian Ocean.
5. Expand Education, Health, & Innovation Linkages: Facilitate smooth functioning of IIT, IIM, and IIFT campuses in UAE. Promote research tie-ups, telemedicine, pharma trade, and digital health collaborations.
6. Promote Startups & Digital Economy: Encourage joint startup funding, DPI (Digital Public Infrastructure) sharing, fintech, and AI partnerships. Set up an India-UAE innovation fund or startup corridor.
7. Ease Mobility & Skill Recognition: Bilateral agreements for eased visa norms, work permits, and skill recognition. Promote professional mobility across healthcare, IT, construction, and academia.
8. Strengthen Multilateral Engagement: Deepen cooperation in G20, I2U2, UN, and AIIB. Jointly advocate for inclusive, rules-based global order and climate justice.

Conclusion

India-UAE relations have evolved into a robust, Comprehensive Strategic Partnership, marked by deepening cooperation in trade, energy, defence, diaspora welfare, and emerging sectors like education, health tech, fintech, and climate action. The high-level visit of the Crown Prince of Dubai in April 2025 further reaffirmed the shared commitment to elevate ties to newer heights through initiatives like CEPA, IMEEC, Bharat Mart, and overseas campuses of premier Indian institutions. As both nations navigate global uncertainties and a shifting geopolitical landscape, trust, people-to-people linkages, economic complementarity, and shared aspirations for a stable, rules-based order will remain the cornerstone of their relationship. With sustained political will and visionary cooperation, India and the UAE are well poised to become key pillars of growth, connectivity, and innovation across the Gulf and Indo-Pacific regions.