India and the United Arab Emirates have agreed to enter a “strategic partnership” during Prime Minister Narendra Modi’s two-day visit to the Gulf state. Modi is the first Indian prime minister to visit the UAE in 34 years. He held meetings with Abu Dhabi’s Crown Prince Sheikh Mohammed bin Zayed Al Nahyan and Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum.
Indian media is calling the visit a “huge success” which could increase the UAE’s investment in India’s aging infrastructure. The two sides have agreed to the creation of UAE-India Infrastructure Investment Fund aimed at raising 75 billion dollars for the Emirati investments in India.
India is UAE’s second-largest trading partner while UAE is India’s third largest trading partner behind the US and China. Trade between the two countries reached 60 billion dollars in 2014. The two sides want to increase the bilateral trade by 60 per cent in the next five years.
“The Abu Dhabi Investment Authority (ADIA), one of the world’s largest sovereign wealth funds, has been keen to invest in India’s infrastructure sector and build a strategic partnership with New Delhi. ADIA is already an investor in India and sees India as an attractive investment destination. India has huge needs for investment in railways, roads, ports, industrial corridors and smart cities.,” said The Times of India in a report.
The most striking aspect of Modi Dubai yatra, his 25th international visit since taking office, was the two countries’ announcement to establish a “strategic partnership” while enhancing cooperation in counter-terrorism operations and intelligence sharing.
Indian media described the joint statement issued at the end of Modi’s talks with Sheikh Mohammed bin Zayed Al Nahyan as a veiled reference to Pakistan, one of Emirates closest allies. “The two nations reject extremism and any link between religion and terrorism. They condemn efforts, including by states, to use religion to justify, support and sponsor terrorism against other countries. They also deplore efforts by countries to give religious and sectarian color to political issues and disputes, including in West and South Asia, and use terrorism to pursue their aims,” reads the joint statement.
It said the two countries “denounce and oppose terrorism in all forms and manifestations, wherever committed and by whomever, calling on all states to reject and abandon the use of terrorism against other countries, dismantle terrorism infrastructures where they exist, and bring perpetrators of terrorism to justice”.
UAE has 2.6 million Indian expatriate population that sends home 14 billion dollars in remittances each year. Addressing a big gathering of Indian community in Dubai, Modi called for a standing ovation for Crown Prince Sheikh Mohammad for allotting land for the first Hindu temple in Abu Dhabi.
The UAE will also reportedly cooperate in the manufacture of defense equipment in India. The Indian Express claimed that New Delhi also got the UAE to back its bid for a permanent seat in the UN Security Council, and push for adoption of a Comprehensive Convention on International Terrorism.
“The joint statement paved the way for promotion of a strategic partnership in the energy sector, including through UAE’s participation in India in the development of strategic petroleum reserves, upstream and downstream petroleum sectors, and collaboration in third countries,” said the Indian Express in a report.
Pakistan has traditionally maintained very close relations with the UAE. However, strains appeared in April this year when UAE’s Minister of State for Foreign Affairs Dr Anwar Mohammed Gargash criticized Pakistan’s “ambiguous stand” over Yemen conflict.
The GCC countries lead by Saudi Arabia and the UAE had requested Islamabad to join the military strikes against Iran-backed Houthi rebels in Yemen. Islamabad, toeing the line of Turkey and Oman, decided to stay neutral in the conflict. The Pakistani parliament passed a resolution asking the government not to take sides in the conflict. Saudi Arabia and the UAE, Pakistan’s closest allies, expressed dismay at Islamabad’s decision.
Khaleej Times, one of UAE’s oldest dailies, quoted Garhash warning Pakistan of having to pay a “heavy price” for taking on what he called an “ambiguous stand”. He added that Pakistan should take a clear position “in favor of its strategic relations with the six-nation Arab Gulf cooperation Council”.
“The Arabian Gulf is in a dangerous confrontation, its strategic security is on the edge, and the moment of truth distinguishes between the real ally and the ally of media and statements,” Gargash tweeted moments after the Pakistani parliament passed the resolution.
Pakistan’s decision was seen as a balancing act in its often terse relations with Iran. New Delhi has been offering Iran help develop its strategic Chabahar port in southeastern Iran. It pledged to invest 85 million dollars on the port’s development in the first phase. In all New Delhi planned to invest almost 200 million dollars on the strategic port. India’s unusual interest in the Iranian port was seen in Pakistan as an effort to challenge the importance of Pakistan’s Gwadar deep sea port. An agreement was formalized during a visit to Tehran by India’s shipping minister Nitin Gadkari earlier this year. However, Iranian port authorities informed an Indian delegation doing followup on the agreement in June this year that the port’s development contract had been assigned to an Iranian company.
“This turnaround came as a rude shock to India which was hoping to take over two berths on lease and build container as well as cargo terminals,” Indian daily The Economic Times reported on August 17. Modi raised the issue with Iranian President Hassan Rouhani at Ufa, Russia, on the sidelines of SCO summit in July this year. The Indian government also took up the issue with the Iranian Foreign Minister Mohammad Jawad Zarif during the letter’s recent visit to India. However, Zarif reportedly downplayed the matter as a local problem during his talks in New Delhi. It is not clear if Tehran is having a second thought over India’s role in the emerging geopolitics.
It is in this context that the warming India-UAE relations will be seen by many and may irk some in Islamabad and Tehran. Yemen conflict is seen as a war between Iran and Arab countries. Without reading much into the emerging warmth in India-UAE relations, it may have some regional implications which could prepare ground for a new realignment. Besides fighting it out in Yemen, Iran and the UAE have longstanding territorial dispute over three islands at the mouth of Persian Gulf. The dispute has remained a source of friction between Abu Dhabi and Tehran for years.
Diplomatically Pakistan has done little to alley Abu Dhabi’s apprehensions about its stance on the Yemen conflict. The country’s top political leadership has frequented to the UAE but not officially. These visits by senior politicians have mostly been private pleasure trips to their villas in Dubai. Pakistanis have some of the largest investments in UAE’s property market.
Former president Asif Ali Zardari, considered close to the UAE, has a home in the Emirates. His slain wife and former prime minister Benazir Bhutto lived in exile in Dubai for years. However, Zardari too has kept a mum on the unacknowledged dip in his country’s relations with his Arab hosts. Dubai is considered to be the major transit route for transfer of hundreds of millions of dollars looted by Pakistani public officials. Many top government officials, including Pakistan’s finance minister, are believed to have huge personal business stakes in the Emirates.
Prime Minister Nawaz Sharif paid visits to Saudi Arabia after the parliamentary resolution. Aside from mending his personal relations with the House of Saud, it is not clear how far Sharif’s visits have helped repair the damage at the state level. But there are signs of some revival as Saudi Arabia announced appointment of Abdullah Marzouk Al-Zahrani, as the country’s new ambassador to Pakistan earlier this month. The ambassador’s appointment comes after a lapse of one year. Saudis are Sharif’s biggest benefactors. Riyadh brokered a deal with former military ruler General Pervez Musharraf under which Sharif along with his family was exiled to Saudi Arabia in December 2000.
The India-UAE partnership may have limited regional implications but it will certainly unnerve many in the Pakistani capital that has always preferred personal contacts over diplomacy in defining the country’s relations with most of the Arab countries.