The depth of India's relationship with the UAE means that, whatever the opportunities of One Belt One Road, it is not a market that should ever be ignored
Although much of the UAE’s attention for the last week or so has, rightly, been on its ever improving relationships with China, people and businesses in the emirates would be well advised to neither forget nor neglect its long-standing and vitally important relationship with a much closer neighbour: India.
The UAE, of course, remains home to 3.3 million Indian nationals, the most of any population in the country – including Emiratis. Many of these form a crucial part of the UAE’s business community, a fact perhaps best exemplified by the lives and careers of the men that form our “Icons” feature in this week’s edition.
Although local hotels have catered to the Indian source market, they are increasingly wooing Chinese visitors”
The importance of India’s economic contribution to the UAE – and vice versa – cannot be understated, and it continues to grow. In the last four years alone, the importance of this relationship has been highlighted by three top-level state visits to the UAE, two of them, in 2015 and 2018, by Prime Minister Narendra Modi. In 2017, Abu Dhabi Crown Prince Mohamed Bin Zayed Al Nahyan was invited as the Indian government’s chief guest for Republic Day celebrations, joining the likes of Barack Obama, Vladimir Putin and François Hollande in receiving the intensely symbolic honour.
From an economic standpoint, India and Indian nationals have a very clear everyday impact. Let’s take the real estate sector. According to Dubai Land Department statistics, Indians have bought properties worth $22.6bn in the emirate, in addition to the hundreds of thousands of properties they rent. Put simply, without this contribution the UAE wouldn’t be what it is today.
In India itself, UAE companies continue to find ample business opportunities. In the last several weeks alone, it should be noted, a DP World joint venture in the country acquired a 90 percent stake in a warehousing corporation, and reports indicated that the Abu Dhabi Investment Authority (ADIA) will invest $1bn to acquire a stake in an India-listed petrochemicals business. That’s just the tip of the iceberg. In ADIA’s case, the company had earlier already signed a $1bn investment agreement with India’s National Investment and Infrastructure Fund.
That being said, competition is now rapidly heating up, particularly with China. According to a recent report from research firm Arabia Monitor, cumulative trade between the UAE and China amounted to $124.9bn between 2014 and 2016, compared to $121.5bn in cumulative trade with India during the same period. Since then, the competition has only gotten fiercer, with Chinese non-oil trade with the UAE totalling $47.92bn in 2017, compared to $26.95bn for India.
For local businesses and for the UAE as a whole, however, this competition is a good thing. Let’s take the tourism sector, in which India remains the most significant source market, with 963,000 visitors coming to Dubai between January and May 2018 [compared to 401,000 Chinese visitors in the same period].
According to Dubai Land Department statistics, Indians have bought properties worth $22.6bn in the emirate”
Although local hotels and retail establishments have taken pains to cater to the Indian source market in the past, they are increasingly wooing Chinese visitors. Ultimately, any additional influx in tourists will result in more hotel rooms being occupied and more money spent in local malls.
That isn’t to say, of course, that the Indian market should in any way be neglected in the face of increased competition from China, or anywhere else in the future. India’s long history of ties with the UAE – which in fact predates the UAE itself by many, many years – and its vibrant community here mean that it must always be valued.