UAE sets ball rolling for increased ties with India

Mumbai: "The writing is on the wall" for fresh engagement within the Middle East, North Africa and South Asia regions, said Kamal Nath, India's Union Cabinet Minister of Road Transport and Highways, addressing the ‘India-UAE' Partnership conference in Mumbai on Thursday.

The event, led by the Dubai International Financial Centre (DIFC) and supported by the Federation of Indian Chambers of Commerce and Industry (Ficci), sported plenty of data and deliberation as to the opportunities between the two countries in light of a world whose shifting economic centre of gravity has been hastened by the global financial crisis. The minister praised DIFC for sensitising people to the investment potential in that process.

While mutuality of purpose, on the back of the traditional, commercial engagements, were the underlying thread, the most obvious objective prompting the coming together was India's need for infrastructural finance. Whereas only 1-2 per cent of India's foreign direct investment (FDI) at present comes from the Gulf, its pending multi-billion dollar outlays in roads, rail, ports and power, as well as intended in health care and education, offer an exceptional chance to investors.

Against the backdrop of India's reforms and resilience, and its demand growth propelled not only by policy fundamentals but demographics, "the next decade has to be decade of infrastructure", said Nath, within which India's road system would be point of focus, with $20 billion (Dh73.5 billion) — and 7,000 kilometres — of projects currently in view.

Several speakers referred to the existing annual UAE-India trade of $44 billion as the foundation for something much bigger.

Dr Omar Bin Sulaiman, Governor of DIFC and vice-chairman of the UAE Central Bank, alluded to the $18.3 trillion of hydrocarbon resource wealth at the Gulf's disposal, assuming an oil price of $50. India, meanwhile, with its large and rapidly-growing market, could readily deploy substantial funding. In between these two powerhouse propositions, with "many avenues to explore", DIFC could be a gateway for financial flows in both directions, he said.

The participation of the UAE and GCC countries in India's infrastructural growth can create a new momentum in an economy where a target has been set to build 20 kilometres of road per day leading to 7,000 km in a year, said Nath.

This translates into a total investment of $80 billion in the next three to five years with $40 billion anticipated from the private sector. The minister said 20,000 kilometres of road work was already in progress and in the next eight months, his ministry would bid out $20 million worth of work.

Resilience

He said India, which had demonstrated that it was resilient to the global recession, was a "credible investment destination, especially since Asia would be the engine of global growth. The DIFC could play an important role in sensitising the people of the region as well as western countries. This participation can create a new momentum."

Sulaiman remarked that the outlook was clearly positive and "nowhere more so" than in Asia and the Middle East.

"What's happening is that the centre of gravity of the global economy is shifting east. India is, of course, at the heart of this shift."