UAE is 10th largest investor in India's FDI sector: Ambassador Kapoor
The UAE, India investment ties stand on a strong foundation of mutual trust: Envoy Kapoor
The Indian Ambassador to the UAE, Pavan Kapoor, who assumed office in October 2019, spoke exclusively to Khaleej Times on a range of issues such as bilateral ties, growing trade and commerce between the two countries, a sneak peek into the India Pavilion at the upcoming Dubai Expo 2020, upskilling of Indian workers to how the UAE has emerged as one of the leading seats of Arab culture in the region.
This is the second part of a three-part series.
The UAE has emerged as the 10th largest investor in the foreign direct investment (FDI) sector in India. The ambassador spoke about the sectors that the UAE can invest more in and how New Delhi could reciprocate.
“The investment relationship between India and the UAE stands on a strong foundation of mutual trust and common aspirations. During Prime Minister Narendra Narendra Modi’s visit to the UAE in 2015, both countries agreed to set up an India-UAE Infrastructure fund with an aim to reach $75 billion (b) investments into India’s infrastructure sector. Since then, we made great progress and major investors from UAE have made significant investments in the last few years and the trend is continuing. It is also natural that investments would need handholding at various stages to facilitate the procedures. In this context, we have worked and will continue to work closely with our UAE partners to facilitate their investments in India.
"For example, the Indian government took a special decision in 2019 to not club various UAE sovereign wealth funds as one sovereign entity for the purpose of 10 per cent limit on Foreign Portfolio Investment, and also agreed to grant tax exemptions for foreign sovereign investments like that of the Abu Dhabi Investment Authority (ADIA) made in long-term infrastructure projects in India. In February, the Indian government also decided to extend special eligibility for foreign portfolio investors from the UAE that would expand their presence in India.
"As a step towards strengthening the people to people, trade links and strategic ties between the two countries, India announced a visa on arrival scheme for Emiratis in November 2019, only the third country to receive this facility from the Indian government.”
He also held forth how the UAE can invest through the National Investment and Infrastructure Fund (NIIF) and how ADIA be a force multiplier, despite the raging Covid-19 pandemic.
“India aims to become a $5 trillion (t) economy by 2025. In addition to the potential for bilateral cooperation in existing areas such as realty, infrastructure, and manufacturing, both sides are looking at health and insurance, banking and finance, education and online resources, retail, tourism and hospitality, new and emerging technologies like fintech. The Indian start-up ecosystem with close to 20,000 start-ups is emerging as another platform for bilateral cooperation.
"India believes in converting challenges into opportunities. PM Modi has given the direction to India’s future growth through his vision of ‘Atmanirbhar Bharat’ and the UAE is a natural and an important partner in realising this vision. We concur with the UAE leadership that the Covid-19 pandemic is testing the strength of relationships between countries, but as our close cooperation even during this time has seen, our relationship is set to grow further and closer especially as we work to rebuild our economies in the post-Covid 19 scenario.
"ADIA is among the most active foreign investors in India. The NIIF, India’s first sovereign wealth fund, signed a $1b investment agreement with a wholly-owned subsidiary of ADIA in October 2017 to invest in much-needed energy, transportation, and other infrastructure-related sectors in India. ADIA is investing $1b in affordable and mid-income housing projects in India’s leading cities through an HDFC housing fund. It has deployed its funds in real estate, private equity and backed two of the largest renewable energy companies of India, investing over $400 million (m) in ReNew Power and Greenko, $500m into renewable energy via Kotak, and $300m into the highways sector via Cube Highways. The NIIF and Dubai-based ports operator DP World Private Limited. announced the creation of an investment platform to invest up to $3b in ports, terminals, transportation, and logistics businesses in India. These examples give some flavour of the larger investment interests of ADIA and other UAE players,” he said.
The envoy also spoke about Abu Dhabi National Oil Company's (ADNOC’s) plans to build the strategic oil reserve amid a rebound in global crude prices.
“India and the UAE share a strategic energy partnership and we have come a long way in our journey together from a buyer-seller relationship to strategic cooperation and beyond," he said.
He added, "The strategic petroleum reserve in Mangalore, Karnataka has been commissioned and the historic first cargo of crude oil from the Abu Dhabi National Oil Company (ADNOC) for the Indian Strategic Petroleum Reserves Ltd. (ISPRL) reached India in May 2018 under an agreement between ADNOC and ISPRL, an Indian government-owned company mandated to store crude oil for strategic needs, to store 5.86m barrels of ADNOC crude oil at the Karnataka facility in the Indian city of Mangalore. The participation of ADNOC in setting up our strategic reserve has been crucial and given us the confidence to continue on this path in the future too. We are confident that ADNOC will continue to play a prominent role in our future projects in this area.”
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