A billboard welcoming Shaikh Mohammad Bin Zayed to India. Image Credit: Omar Ali/Gulf News

Abu Dhabi: The UAE investments in various sectors in India are likely to go up, especially in infrastructure and energy, due to the visit of His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, analysts said on Tuesday.

The UAE is already a big investor in India with total investments amounting to $8 billion concentrated mainly on five sectors — construction, power, metallurgical industries, services sector and computer software and hardware. Emaar, DP World, Abu Dhabi’s National Petroleum Construction Company, Abu Dhabi National Energy Company (Taqa), Drake and Scull International are some of the prominent companies which are currently active in India in various projects.

The two countries have also set up the UAE-India Infrastructure Investment Fund with a target of $75 billion (Dh275 billion) when Indian Prime Minister Narendra Modi visited the UAE in 2015.

The initiative is expected to be put on fast track as the Abu Dhabi Crown Prince visits India.

“We might see UAE investing more in India’s infrastructure, defence, manufacturing and energy sectors due to the visit of Abu Dhabi Crown Prince,” Gary Dugan, chief investment officer at Emirates NBD, told Gulf News.

He said India has been focusing on developing its manufacturing sector through Make in India initiative and the UAE will be keen to participate in that sector to give a boost to bilateral trade between the two countries.

“Energy is another sector where the UAE will be keen to invest in India,” he added.

During the Abu Dhabi Crown Prince’s visit to India last year, the two sides sought to promote strategic partnerships in the energy sector through the UAE’s participation in the development of oil storage facilities at the strategic petroleum reserves on India’s West Coast.

According to the Indian Embassy, talks are progressing well on oil storage and an agreement is likely to be signed very soon.

India, which imports about 80 per cent of its oil needs, is building emergency storage in vast underground caverns to hold some 36.87 million barrels of crude as it seeks to hedge against energy security risks.

India will also be looking for more investment in the development of small oil and gas fields that have potential to produce 625 million barrels of oil.

“India is a large and fast-growing emerging market economy which is forecast to become the world’s fifth largest economy this year, overtaking the UK in terms of total GDP size. The Indian economy offers a broad range of investment opportunities for UAE assets, in a wide range of sectors such as infrastructure projects, real estate developments, energy projects and tourism,” said Rajiv Biswas, Asia Pacific chief economist at IHS Global Insight based in London.

He said India is seeking large foreign capital inflows to accelerate economic development, while the UAE is seeking to diversify its economy into a wider range of industries.

“There is a strong complementary economic relationship between UAE and India,” he said.

The Abu Dhabi government has recently merged two of its biggest companies, Mubadala and International Petroleum Investment Company, to create an international investment powerhouse with combined assets of $125 billion to boost its investments across the globe.

“The slump in world oil and gas prices since 2014 has highlighted the importance for the UAE and other Gulf nations to diversify their economies and create new growth industries,” said Biswas.

Oil prices have plunged by more than 50 per cent in the last two years forcing many Gulf countries to increase their source of income from non-oil related industries and through investments outside the country.