Afro Asian Business Chronicle

UAE:  Non-Oil Trade High On Agenda

The UAE and India have recently stressed on the need to reactivate the institutional arrangements between two countries to further enhance bilateral trade and investment even as India accounts for 60% of the UAE's total value of imports. In an exclusive interview to Renu Malhotra, Editor-in-Chief of Afro Asian Business Chronicle, the UAE's Ambassador to India H.E. Mohamed Sultan Al Owais shared his perspective on the growing economic relations between the two countries. Edited Excerpts:

How do you perceive the rising bilateral relations between the UAE and India?

Growing Indo-UAE economic and commercial relations have contributed to the strength and stability of a rapidly diversifying and deepening bilateral relationship. Bilateral trade partnership between the two countries can be elevated with the support of the large presence of the Indian companies in the UAE and vice versa. The bilateral trade between India and the UAE for the financial year 2009 was $44.53 billion. And India has featured in the list of leading exporters to UAE free zones last year with total export value of $30 billion i.e. 66% of the total values of the country's imports. During the Indian president Pratibha Patil's recent visit to the UAE, emphasis was laid on reactivating the institutional arrangements between two countries, like the India-UAE Joint Business Council; the India-UAE Joint commission for the Economic, Technical and Scientific cooperation; Indian Business Leaders Dubai Forum; and India Trade & Exhibition Centre Middle East, which was inaugurated by Patil and His Highness Sheikh Sultan Bin Mohamed Al Qasmi, Member of the UAE Supreme Council and Ruler of Sharjah on November 25. I think...the bilateral relations have yielded outstanding results and the two countries should utilise all available opportunities to seek greater heights.

Which will be the focus sectors to further enhance bilateral trade?

In the evolving global scenario, trade, commerce, and foreign direct investment (FDI) would be the cornerstone of India-UAE ties in the 21st century. I think India and UAE can have significantly beneficial relations due to increased cooperation in their respective oil-industry sectors and establish long-term relationships in the field of petrochemical industries. Therefore, cooperation in the fields of Technical and Scientific Research and Development as well as Renewable Energy Sector and Educational Exchange Programme and the Tourism sectors have good potential for future growth.

What about non-oil trade between the UAE and India?

Each Emirate in the UAE has taken steps to nurture the development of non-oil industries, in terms of providing attractive structures and support mechanism through developing facilities such as- Industrial zones, Business parks, and vital energy and transport network. India and the Gulf Cooperation Council (GCC) are also negotiating on Free Trade Agreement (FTA). I hope it will be concluded in near future, and the UAE will be able to maintain its position as a hub for services and commodities trade. The UAE is keen that the FTA should enhance economic competitiveness on the basis of free and fair trade.

What about Indian investment in Special Investment Zones in the Emirates?

We have developed a new model of zones of special economic nature, allowing total ownership of the business in the UAE. Indian companies have emerged as important investors in the free trade zones of the UAE, such as Jebel Ali Free Trade Zone in Dubai, Hamriyah in Sharjah, Abu Dhabi Industrial City, Ajman, Ras Al Khaimah and Fujairah Free Zones etc. According to the reports of our Federal Customs Authority (FCA) - India has featured in the list of leading exporters to UAE free zones in 2009 with a total export value of $30 billion or 66% of the total value of the country's imports. I think these will go a long way in strengthening relations between the two countries, while maximising investment from the Indian business community in high potential UAE's business hubs.

How about UAE investment in India?

No doubt, India is an attractive destination for foreign investment. Indian President during her recent visit made a strong pitch for greater investment from the UAE, asking to be a part of its growth story, particularly in the infrastructure sector.

According to the latest FDI figure released by Ministry of Commerce and Industry, Government of India, UAE is the 10th largest foreign direct investor in India (top investor Mauritius, USA, Singapore and UK) for the period April 2000 to October 2010 with the total cumulative FDI inflows of $1.82 billion. However, UAE's total cumulative investment is over $6 billion in India through FDI (Foreign Direct Investment) and FII (Foreign Institutional Investors) routes. The top sectors attracting FDI inflows from UAE are power (14.93%), services sector (11.10%), Metallurgical Industries (7.52%), Housing & Real Estate (6.83%), and Construction Activities (6.76%).

Some of the states in India like Gujarat and Orissa have created special petro-chemical zones? What is the kind of UAE investment flowing into such zones?

There are large numbers of Special Economic Zones in India that beckon UAE investors. Gujarat and Orissa both have attractive investment plans. In Gujarat - UAE's company "Dubai Port World", a leader in international marine terminal operations has a 100% equity stake in the $364.77 million "Mundra International Container Terminal" (MICT) facility and executes full operational control. Another UAE's tiles manufacture, RAK (Ras Al Khaimah) Ceramics India, plans to set up a tile plant in Ahmedabad, at an invest that of $150 million. The plant will be commissioned by early-2012.  And about Orissa I think it is a lucrative destination for all kinds of investments. We have several attractive options for the UAE investors to invest in Orissa. We hope for the more enduring partnership in long term investments and participation in each other's development efforts.

A large number of Indians are living and working in the UAE? What special concessions are being extended for Indians to own property in the UAE?

Indian community is the largest expatriate community in the UAE, numbering about 1.75 million. The Indian community has played major role in economic development of the UAE and is respected for its professionalism and reliability. The UAE government is always keen to secure a safe and attractive environment for the Indian expatriate community. The Ministry of Labour of the UAE government is initiating many welfare measures to help overseas workers. The Government of India has also initiated programmes for the welfare of Indian Workers abroad. Recently, President Pratibha Patil, during her UAE visit inaugurated the Indian workers Resource Center in Abu Dhabi, which apart from assistance including counseling, will provide a 24-hour helpline for workers. According to the freehold property law which came into force in 2002 in Dubai, expatriate owners are permitted to derive benefit from and to let their properties in the emirate, but only in areas designated by the ruler. The freehold owners, as set out under this law, are deemed to have absolute rights in their property. These liberal and easy to access laws make Dubai a real heaven for all international either Indian or other nationals.