Indian PM Modi in Mideast
(Modi focuses on foreign investments in India)
-Dr. Abdul Ruff
In continuation of his official foreign tour for securing Indian economic and foreign policy interests (like UN veto, Kashmir etc), Indian Prime Minister Narendra Modi in on two-day visit to the United Arab Emirates (UAE).
The United Arab Emirates has the world’s seventh largest oil reserves and the seventeenth largest gas reserves. UAE is India’s biggest investor with total FDI from UAE to India pegged at three billion dollars.
India economy has got a boost thanks to regular foreign remittances especially form Mideast. India provides labor force to Mideast and elsewhere. Denied jobs in India, Indians -mostly Muslims throng Arab world for jobs.
Indian PM Narendra Modi’s two-day visit to the UAE should be looked mainly at from economic perspective. Seeking investments from the cash-rich country like the UAE, which Modi rightly described as a “mini India” with 2.6 million Indian expatriates accounting for 28 percent population of the UAE, has to be obviously very high on the Indian prime minister’s radar screen.
Modi arrived at the Abu Dhabi Presidential Airport on Sunday for his maiden official visit to the gulf nation. Upon his arrival, he was received by the Crown Prince of Abu Dhabi, His Highness Sheikh Mohamed bin Zayed Al Nahyan. Prime Minister Modi then met with the UAE dignitaries and exchanged pleasantries with them. This is the first visit by an Indian Prime Minister to the gulf nation in 34 years.
Narendra Modi has begun his first ever Mideast trip by starting in the United Arab Emirates – a stand-alone bilateral visit to , UAE a near-abroad country so important for India today that deserves a special attention from New Delhi that. Modi visited the UAE in 34 years – the first ever Indian PM to do – reached out to Indian workers in the UAE on August 16 to know their problems and discussed ways how the Indian government can help them. Modi interacted with Indian workers at their camps I-CAD Residential Labour Camp that houses thousands of migrant laborers from the Indian subcontinent in an area spread over one square kilometer.
Abu Dhabi, the UAE capital where Modi camped before he landed in UAE, has a sovereign wealth fund of about $800 billion. This fund is parked with the Abu Dhabi Investment Authority. Dubai, where PM Modi will be reaching on Monday, has a similar fund with Dubai Investment Authority boasting of around $500 billion in its kitty. Put together, the two sovereign wealth funds amount to a staggering $1.3 trillion. Not many countries in the world can boast of this kind of whopping sum set aside solely for the purpose of investment.
Narendra Modi discussed investment opportunities over high level dinner which is hosted by HH Hamed bin Zayed Al Nahyan, MD of Abu Dhabi Investment Authority. “Our shared values and strong bilateral ties provide an important basis on which the UAE and India can elevate their relationship to a comprehensive strategic partnership,” said Shaikh Abdullah bin Zayed Al Nahyan. Modi’s visit to the UAE provides an opportunity to chart a new course in their partnership for the 21st century. “We look forward to a productive exchange of ideas covering a wide range of economic, political and security issues of mutual interest,” he said ahead of Modi’s two-day visit.
Later, Narendra Modi interacted with the investors in UAE and said that India is a land of many opportunities. Addressing investors meet, Modi said, “India is a land of many opportunities. 125 crore people of India are not a market, but they are a source of great strength.” Stating that UAE’s power and India’s potential can make the dream of an Asian Century a reality, Modi added, “Infrastructure development and real estate offer tremendous opportunities for UAE businesses in India. We have got legacy problems; priority to kickstart things that were stalled due to indecisiveness, lethargy of past governments.” Modi also said that there is an immediate potential for US$ 1 trillion investment in India and country has got a decisive and stable government. Later in the day, Modi will address Indian diaspora at the Dubai cricket stadium, where around 50,000 people have registered to attend.
UAE’s power and India’s potential can make the dream of an Asian Century a reality.. I feel India is a land of many opportunities. UAE king said India has never tapped the potential of tourism, there is a lot of possibility in hospitality industry and he will send his Commerce Minister to try and find solutions to the problems faced by some UAE investors. Infrastructure development and real estate offer tremendous opportunities for UAE businesses in India. In the agriculture sector we need cold storage network and warehousing network where UAE businesses have another advantage.
Modi said India has got legacy problems; priority to kickstart things that were stalled due to indecisiveness, lethargy of past governments. Immediate potential for USD 1 trillion investment in India; Country has got a decisive and stable government.
The two principal Indian political parties, the BJP and the Congress, have been working at cross purposes for years with respect to these two legislations. When Congress was in power, the opposition BJP stalled these legislations and now when the tables have been turned the Congress is paying back the ruling BJP in the same coin. This kind of political scenario is not good for international investments in India.
As expected, PM Modi surely is pitching for the UAE investments in India, both during his Abu Dhabi and Dubai legs of his visit. PM Modi woos UAE investors, says immediate potential for US $1 trillion investment in India. However, it is not just investment alone that makes the UAE a key country for India. On security front, the importance of UAE for India has grown even further in the wake of the Islamic State (ISIS) entrenching itself in the region. That is why PM Modi today made a strong pitch in Abu Dhabi for closer partnership between the two countries and counter terrorism jointly. India is eager to use terrorism to come closer to every nation with a view to advancing its global interests, especially to become a super power at the earliest
India desperately needs uniform taxes and that’s why the Goods and Services Tax (GST) legislation is of crucial importance for India. This legislation will ensure uniform tax across the length and breadth of the country. But practically all 29 Indian states and seven union territories have their own taxation structures. The Modi government was not allowed by the opposition to even introduce the GST bill in the just concluded monsoon session of parliament. Any foreign company which is desirous of parking its investments in India would need to set up a manufacturing unit for which it would require land. But the land Acquisition Bill too has been hanging fire.
Narendra Modi also continued his ‘selfie diplomacy’ as he visited the Sheikh Zayed Grand mosque, the UAE’s largest and the world’s third largest, on his first visit to the Emirate. Clad in a kurta with an orange and white stole, Modi walked around in the mosque and looked at the architecture as he was briefed on the exquisite skill that went behind creating this key place of worship. Modi, who has a penchant for selfies, has clicked them in the past with several leaders and the ‘selfie diplomacy’ has emerged as an integral part of his overseas trips. During his May visit to China, he clicked one with his Chinese counterpart Li Keqiang. In April, he had clicked a selfie with Indian students who gathered around him during his visit to the French Space Agency. Last year, during his trip to Australia, Modi posted a selfie with his “friend” and Australian counterpart Tony Abbott.
Meanwhile, Modi, while addressing business leaders of the UAE in the Masdar City of the Gulf country, said his government has got some problems in legacy and his immediate priority would be to kickstart the things which were stalled by the “indecisiveness and lethargy” of the past governments. Some things were stalled due to the indecisiveness and lethargy of the governments in the last..” It is my priority to kickstart those things,” he said. Congress spokesman Sanjay Jha retorted, “It is abominable that PM Modi continues his pathetic lowbrow jibes at opposition party when abroad. A huge embarrassment” “Prime Minister should have maintained dignity of the high office he holds. There is no problem if he targets previous governments when he is in India but he should have refrained from doing so on foreign soil”, party spokesman Meem Afzal said. Afzal said that it was not proper for Modi to rake up domestic politics abroad despite repeated uproar by the opposition for his earlier such actions.
The real importance of the UAE for India lies in its mind-boggling investment potential but it is a high-hung fruit which proved to be impossible for the Manmohan Singh government to pluck and is well impossible even for the Modi government
Many say it would be very difficult for PM Modi to sink his teeth into sovereign wealth funds of foreign countries, the purpose and the nature of these funds need a little elaboration. Sovereign wealth funds invest globally in such areas like stocks, bonds, real estate, precious metals, or in alternative investments such as hedge funds. These funds are typically created by such countries which have budgetary surpluses and have little or no international debt. Clearly even to think of having such a mechanism is a luxury for poor developing countries like India, which have budgetary deficit year after year. At best, New Delhi can eye these funds and persuade countries having such plush funds to invest in India.
The reason why Modi may not be able to get a slice of the cake of UAE’s enormous sovereign wealth funds is because of inherent structural weaknesses in Indian taxation and investment climate.
This is Modi’s first visit to an Islamic country outside SAARC, the first being Bangladesh. One only wonders how and why no Indian prime minister found time in last 34 years to pay a bilateral visit to an important country like the UAE.
Two other Arab world countries – Saudi Arabia and Kuwait – too have long and deep pockets and have similar sovereign wealth funds. Saudi Arabia is believed to have sovereign wealth funds in excess of $671 billion while the figure for Kuwait is $592 billion.
PM Modi will be visiting Saudi Arabia, the leader of Arab world effectively controlling not only world’s largest oil reserves but also Sunni world, in near future and though, as of now, a visit to Kuwait does not seem to be in the works, but Kuwait too may be roped in his itinerary in coming months.