A slew of investment deals and a boost to economic ties are expected as Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces arrives in India on Wednesday on his first official visit to the country.
UAE investments worth billions of dollars to India are likely to be finalised, with energy and aerospace among the sectors that are set to be areas of focus.
“This visit will push initiatives taken to the next level,” said Umesh Mehta, the head of research at Samco Securities in Mumbai. “Mutual cooperation will further get deepened resulting in economic benefits to both countries.”
He added that it was no surprise that the UAE would be looking to invest more funds in India, which was “one of the best performing emerging markets”. On Monday, India issued an economic growth forecast of 7.6 per cent for the current financial year, which runs to the end of March.
Trade and investment ties between the UAE and India are already extremely strong, with an expat population of Indians in the Emirates totalling more than 2.6 million, maintaining strong flows of remittances from the UAE into India.
Ajay Kumar, the chairman and managing director of Fox Petroleum, based in New Delhi, which is an associate company of Fox Petroleum FZC in the UAE, said there was plenty of potential for the UAE to invest in India’s energy sector.
“We are expecting investment into the energy sector, including terminals, refineries, which will enhance the economy of India as well as the returns for the UAE,” he said.
Sheikh Mohammed will begin his three-day visit to India in New Delhi, accompanied by a delegation of ministers, economists and almost 100 business executives. He is due to meet India’s prime minister Narendra Modi tomorrow, before travelling to Mumbai.
Mr Modi is eager to increase foreign direct investment into India and boost the economy after coming to power in May 2014, because his campaign included promises to revive the country’s economic growth. He has said that India needs $1 trillion of investment in sectors ranging from energy to property.
Sheikh Mohammed’s visit follows on from Mr Modi’s trip to the UAE last August, which resulted in a $75 billion fund being announced by the two countries to invest in infrastructure in India. Poor infrastructure is often cited as major factor that deters potential investors. The two nations also highlighted plans to increase trade by 60 per cent over the next five years.
That was followed by India’s finance minister visiting the UAE in November to meet potential investors.
The latest visit “would help in consolidating the trade and investment relationship further”, said Satish Modh, the director of VES Institute of Management Studies and Research Centre in Mumbai. “The earlier announcements were generic in nature, but in this visit some specific areas of trade and investment should emerge.”
Trade between the two countries reached $59.15bn in the financial year to the end of March, with the UAE being India’s third largest trading partner.
“It’s a very good thing that the Crown Prince is coming here,” said Mohan Gurnani, the chairman of Bombay Sugar Merchant Association and the former president of Federation of Associations of Maharashtra, the state in which Mumbai is located. “We do expect major investment from the UAE. There’s already a lot of bilateral trade. There’s a very cordial relationship between the two countries and there is a lot of scope for further trade and investment to open up. I think that with this visit, the Crown Prince will have an opportunity to see the positives of India and the potential here.”
He added that “Indians look to the UAE as their second home”.
UAE companies that are actively investing in India include Dubai’s Emaar Properties and the ports operator DP World, while Abu Dhabi’s Etihad Airways has a stake in the Indian carrier Jet Airways. India is also one of the UAE’s biggest source markets for international tourists.
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