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India’s Economic Resilience Impresses Mohammed

Ravi S. Jha / 11 March 2010

NEW DELHI — The UAE has expressed a desire to study India’s successful economic growth story, believing that the strategy involved has transformed the billion-plus population nation from being mere bit players into becoming role models for global financial giants.

Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. who visited India on Thursday, expressed his strong admiration for India’s rapid economic progress, and said that world has to look at India carefully, to at least make themselves familiar with the country’s art of managing the economy so adroitly even during a period of global meltdown.

Shaikh Mohammed, who met Indian Prime Minister Dr Manmohan Singh — the architect of the Indian economic liberation — was unequivocal in his praise for the way India has weathered the present storm.

Minister of State for External Affairs Shashi Tharoor told Khaleej Times that Shaikh Mohammed had candid discussions with the Prime Minister which covered possible steps the UAE could take to more swiftly energise its economy.

Tharoor was quoted as saying, “In Abu Dhabi and Dubai, there is an expressed desire on both the sides to build on the synergies which emanate from the strong ties we share and enhance and develop it to advantage in various fields of endeavour. It provides an opportunity for us to recognise the value of the roles India and the UAE can play in each other’s economic development at various levels.”

The India-UAE relations have been growing in several disciplines in the recent times. Bilateral trade between the UAE and India was worth $44.5 billion in 2008-2009. India is now the UAE’s top trading partner with non-oil trade totalling nearly Dh150 billion. This accounts for about half of India’s total trade in the Gulf region.

The UAE is also is one of the major investors in India with over $5-7 billion investment through foreign direct investment and FII route in diverse sectors of the Indian economy, while India is the third largest investor in the UAE. The UAE has a planned investment outlay of $180 million to develop the first phase of a port at Kulpi in West Bengal.

Top business analysts suggest that the UAE is fully conversant with the priority inherent in enhancing investment cooperation, particularly on investment from UAE .

The UAE is the 10th largest foreign direct investor in India and has already invested more than $5 billion in the country.

Apart from the issues of oil and expatriates associated with the Gulf and India, the non-oil trade between the two countries has increased more than five-fold in the last six years. The UAE was on top of India’s export destinations with a total of $24 billion. Total remittances to India from the UAE in 2008-2009 were about $10-12 billion, which is around one-third of the total remittances from the GCC.

Commenting on the UAE’s keenness to make investment in the infrastructure sector, India’s chief economic advisor Kaushik Basu said, “Many crucial steps have been taken between India and the UAE, and it is all the more vital that both the sides continue the economic engagement.”

Giving credence to this, India’s Minister for Commerce Anand Sharma added, “It’s without doubt that Dubai is the pivot that drives India’s exhaustive trade engagement with the UAE.”

Dubai-based DP World is currently engaged in marine terminal operations and development, logistics and related services to develop a port and a special economic zone in India at an investment of $220 million.

India’s trade with the six-member Gulf Cooperation Council (GCC) has reached $86.9 billion, putting it ahead of the European Union ($80.6 billion) and ASEAN countries ($44.6 billion). The UAE is ahead of the United States and China whose trade with the subcontinent is valued at $40.6 and $38.9, respectively.

The $20.6 billion in imports for the same period puts the UAE in the second place on India’s top imports after China that has an impressive import figure at $31.3 billion. Besides, it is ahead of Saudi Arabia’s import figure that stands at $19.4 billion.

ravi@khaleejtimes.com

 
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