India and the United Arab Emirates are coming closer at a time when the Middle East is undergoing a shift in the power dynamics with Saudi Arabia asserting more aggressively than before.
The UAE and Saudi Arabia are friendly nations, but the crisis has ridden their relationship, which can be defined as one-upmanship.
However, both of the main players of the Middle East politics are coming closer to New Delhi for their reasons.
UAE Eyes Indian Market
Analysts believe, the UAE eyes India as a big and vibrant destination where it can place a part of its massive petro-dollars, accrued over years.
Due to a huge market with a big and ever-expanding middle class with disposable money, the UAE wants to develop ties with India beyond bilateral trade and export of crude oil.
While the UAE invested $2.9 billion in FY, 2023-24, it was $3.35 billion in FY 2022-23.
UAE Investment In India Goes Up
The oil-rich emirate has parked $19 billion in India since April 2000.
With this, the UAE became the seventh-largest investor in the country.
If reports are to be believed, the UAE’s investment in India is most likely to increase to $100 billion across various sectors.
Analysts believe the oil-rich emirate is interested in investing in India in sectors like Artificial Intelligence, renewable energy, data centers, and transmission infrastructure.
India-UAE bilateral trade reached $84.5 billion between April 2022 and March 2023. It is estimated that the trade may touch $90 billion in FY 2024-25.
Why Is UAE Important For India?
However, the UAE is also important for India for its geopolitical situation and presence in the Muslim Umma or the Islamic world.
The UAE is a significant member of the six-nation group the Gulf Cooperation Council. It has backed India in the group and supported it on the issue of Jammu and Kashmir, much to the chagrin of Pakistan.
Similarly, the UAE is also a member of the Organisation of Islamic Cooperation. As the symbol of the Muslim Umma is divided between Saudi Arabia and Iran, the UAE plays an important for its closeness to Riyadh. India has a dependable partner in the UAE in the OIC.
