India, UAE working to finalise rupee-dirham arrangement for trade: Envoy
UAE ambassador Abdulnasser Jamal Alshaali said the UAE is also keen on revisiting the arrangement for flights to India and introducing flights to more Indian destinations to help bring down airfare
NEW DELHI: India and the United Arab Emirates (UAE) are engaged in technical discussions to finalise a rupee-dirham arrangement for trade as part of the efforts to build on the free trade agreement signed by the two countries last year, UAE ambassador Abdulnasser Jamal Alshaali said in an interview.
The UAE is also keen on revisiting the arrangement for flights to India and introducing flights to more Indian destinations to help bring down airfare, Alshaali said. The envoy further said the UAE has played a role in the past in addressing tensions between India and Pakistan, though any future role in this regard would be up to both countries. Edited excerpts:
What are the new areas that India and the UAE are looking at? Could you tell us about the UAE’s participation in the G20 as a guest country?
This is the second year in a row that we are participating in G20 as a guest country and I think the lessons that everyone has been taking from this is we are even much better organised internally now to manage such participation. The first participation was in 2011, also as a guest country, but we were chairing the GCC (Gulf Cooperation Council) at the time and it was the French presidency. Then it was the Saudi Arabian presidency [in 2020], and we were chairing GCC. Last year with Indonesia and this year with India, we were invited as a guest country. Doing it three times in four [different] years gave us a better momentum internally in terms of who’s in charge of what, the two separate tracks, the working groups, high-level participation and so on. As of now, in India, the official taking part in working group meetings has always been at the ministerial level and we haven’t downgraded that at any point and this is going to continue all the way to the summit.
As far as the relationship goes, I think one thing that captures this is that we have a minister visiting almost every month, if not two ministers. For example, we had (minister of state for foreign trade) Thani bin Ahmed Al Zeyoudi and Minister of State Ahmed bin Ali Al Sayegh coming to the Uttar Pradesh Investor Summit. We had minister Thani going to Bangalore to inaugurate the Ducab Grpoup’s office. We had Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan last November. We have the head of the Federal National Council coming in next month, and [Sheikh Abdullah] coming in [for the G20 foreign ministers meeting]. You can see there is quite some momentum here. The political relationship is obviously great. But what we are also working on is expanding economic and trade ties and to keep doing so over the coming years.
Are there any particular issues that the UAE would like to highlight while participating in this year’s G20?
We want to be an active participant and we want to be a part of the G20’s social fabric. Given where the UAE stands today, regionally and globally, I believe we have quite a strong position to navigate all of the turbulence, regardless of what’s happening around the globe, and we’re able to bridge various opinions and different points of view.
Where does bilateral trade stand almost a year after the signing of the India-UAE comprehensive economic partnership agreement (CEPA)? What is being done to build on this?
At the moment we are at $44 billion in non-oil trade. The target is $100 billion by 2027. The reason we use this figure is because there is a strong partnership in terms of energy security and oil export to India. The figure that we focus on is non-oil. We want to make sure we’re investing in the various sectors that are important to both countries, whether they fall within the CEPA or they don’t fall within it. We want to make sure we expand the aviation ties, we want to invest in food security and by extension, food park projects in different states. Part of this also is taking the CEPA and raising awareness about it. It’s been almost a year since the implementation of the CEPA and you want to max out on that and you want to see if there are more things to be done. We just launched the UAE chapter of the UAE-India Business Council, we’re going to also launch the UAE-India CEPA Council, which is part of the CEPA mandate and that would be looking specifically at sectors that both countries want to focus on as part of the CEPA framework.
Have you kind of identified any sectors in this regard?
Space, defence, food security, pharmaceuticals, healthcare, cultural engagements – those are the main ones. There’s also energy security for both countries, which includes renewable energy.
There has been a demand for several years now for revisiting the aviation arrangements between India and the UAE as the flights have been maxed out. Has there been any progress on this?
The conversation has been ongoing for quite some time now, and you’re right, both sides have maxed out. UAE airlines have maxed out, Indian airlines have maxed out and you can see it from the prices. If you check the price of a ticket today, it’s more than 50% higher than it used to be a few years back or it used to be pre-Covid. That’s already a market signal which we need to pay attention to because we are talking about this entire relationship and aviation is a crucial point in expanding this relationship. If you can’t make sure that you have enough flights and enough seat capacity on this route, then it’s very difficult to expand anything else.
There is also a request from the UAE side to fly to more destinations in India?
There is. It’s not just expanding the current capacity, but also to additional points. Again, this is an ongoing conversation and the aviation sector in India has been going through privatisation. There are all kinds of agreements happening and we understand that, but this is something important for both markets because otherwise, I don’t see how prices are going to go down anytime because it’s a simple demand-supply question.
Any progress on the rupee-dirham arrangement for trade? Has anything been worked out?
The technical conversation is ongoing. There has been an agreement to settle a certain [amount] of trade between the two countries, just not having to go through a third currency. Let’s see, this conversation is an ongoing conversation at the technical level and how they can proceed with it. We also have the remittance facility to make it more direct and easier. There’s still technical issues to be discussed and agreed on.
Given that the UAE is set to host COP28, how do you plan to ramp up cooperation with India on renewable energy? Is there any particular area that you’re looking at, such as wind or solar energy?
It’s everything. What we’re trying to do is to be a part of India’s goal and achieving their renewable energy target. At the same time, the UAE is expanding its renewable energy investments worldwide. We are in 40 countries and we want to make sure that we expand our portfolio in different countries.
In terms of COP28, the main focus that we have at the moment is how can we find areas of cooperation and expand on them that overlap between the G20 and the COP28 presidency. We’re supporting India’s presidency and the Indian government has been doing great in managing the engagements and obviously, we can count on India’s support in the COP28 presidency as well.
Can India and the UAE also work together on funding technology transfers to developing countries as part of climate transition?
One thing that India has been focusing on is South-South cooperation, which is why also they came out with the theme of [being the] voice of the Global South. In that sense, you could tell even from the countries that have been invited to the G20 that this is an area of focus. You can’t work on aspects that impact those countries without having those countries as part of the conversation. As the UAE, we stand in a very good position to navigate all of that. We are able to relate to what troubles the countries of the Global South and at the same time be able to bridge them with developed nations.
Is any work underway to build on India’s arrangement with the Abu Dhabi National Oil Company (ADNOC) for strategic energy reserves?
It is where it is right now. It’s been a major success for the relationship. Energy security is important both for the UAE and for India, and we want to be part of India’s energy security. The fact that the strategic oil reserve has been agreed on and it’s been established and has been ongoing for quite some time, it is quite helpful and constructive, especially given the current state of affairs. I think this was probably, on both sides, a very good foresight into the future and making sure that you know we stabilise the market for our partner.
Any talk [on expanding the arrangement] would be at a technical level, but obviously, this will be up to the Indian government and how they want to take this forward.
Could you tell us more about the UAE’s plans to invest in food parks and renewable energy in India under the I2U2 framework? Has the practical work for this started?
The Gujarat government shared a proposal on specific food commodities and their levels of production and those were shared with [the holding company] ADQ on the sidelines of the I2U2 Business Forum, which took place in Abu Dhabi last week. There was also a conversation between ADQ and officials from Gujarat, so the conversation is ongoing.
ADQ has been the one involved in food parks for quite some time. The initial problem has been that this has been passed on quite a few times, but now ADQ is the main stakeholder from UAE and they have recently met on the sidelines of the I2U2 Business Forum.
Would these investments be in Gujarat or would you also look at other states?
Well, for now, it’s Gujarat. But then, if it works in Gujarat and this seems quite feasible, then this can be expanded elsewhere because the whole idea is looking into food security and establishing the infrastructure for better logistics, better shipping, etc. If it works and it’s easy, then replicate it everywhere else.
The pandemic showed the importance of food security because the Indian side continued to supply food to the UAE despite disruptions.
This is the connection that I was trying to make between energy security and food security. Food security is important for us. We don’t produce that much food and we import a lot of it. And it’s quite vital for us that we have a partner that we can rely on, and India is a reliable partner when it comes to that.
How does the India-France-UAE trilateral plan to ramp up cooperation in areas such as climate change, green technologies and defence?
It is in a very early stage when it comes to the official part of it. As a conversation, this probably has been mentioned here and there a few times. We don’t want to just focus on the bilateral aspect of the relationship with India, but we want to expand other forums. So we want to look into multilateral stuff. I2U2, for example, is a great platform for trilateral cooperation. The main idea here is you have excellent relations with certain countries. We have excellent relations with certain countries. France has excellent relations with certain countries, and we want to leverage the commonalities between all of those, whether it’s country-wise or sector-wise.
Specifically in defence cooperation, are you looking at joint development of hardware?
The conversation is still going on. We had a high-level visit last September, so they came here and met with their counterparts and they moved around. They’re looking at everything. We have our own production capabilities. India is big on “Make in India” in terms of defence production. What we’re trying to find or work on in the future is also expanding this area of cooperation.
In terms of people-to-people contacts and cooperation in education, what’s on the table to take things forward?
We have been working on the cultural exchanges and making sure there’s people-to-people contacts. That people can easily fly between the two countries. We want to also see more Indians coming in to study in the UAE.
We want to always have some sort of exhibition taking place, whether it’s in the UAE or in India. For instance, we recently had the Bollywood exhibition at the Louvre in Abu Dhabi and we want to keep that kind of engagement going. We recently had Jindal Global University sign an MoU with the Anwar Gargash Diplomatic Academy. IIT-Delhi would be meeting with the Diplomatic Academy as well. At the moment, [IIT-Delhi officials] are touring Abu Dhabi for their [planned] campus. Those are ongoing engagements and we want to make sure that we maximize on them.
At a time when growing numbers of Indian students are going to Europe for further studies, what is the UAE’s unique selling point when it comes to attracting them?
I think the unique selling point here is that we have global universities based in Abu Dhabi and Dubai and we are just three hours away. There’re cultural similarities. People have been living in the area for quite some time. We have Emiratis living in India, even though in a much smaller number. When you look at it, why would you send your kids to study 11 hours away when you could just send them to a place three hours away? We have France’s Sorbonne University, the New York University from the US and a few British schools and if you have IIT-Abu Dhabi as well, then there you go.
Are there any new initiatives to boost cooperation in the fight against terrorism and radicalisation?
For both countries, counter-terrorism is important and this has been very clear from everything that came out from both countries. In all cases, this will always be an area of interest for us, as much as it is for India and we will always continue to look into how we can expand our cooperation.
The Pakistan prime minister recently spoke about asking the UAE leadership to help build a bridge with India. There were reports that the UAE and Saudi Arabia helped reduce tensions between India and Pakistan in 2019. Where does the UAE see itself in this process?
So our relationship is good both ways, right? And we have played such a role in the past, but again this is going to be up to both countries and whether this is something that they would want us to do or not. But as a country, we continue to maintain very good relations with both countries.