T.P. Seetharam – Indian Ambassador to the United Arab Emirates
The ambassador of India to the UAE, Mr. T.P. Seetharam, explains the deep-rooted history of trade and investment between both nations, the increasing demand for Emirati oil in India and the future of trade and investment under the recently published India-UAE Joint Statement.
How intricate is the historical relationship between India and the UAE?
India-UAE relations have remained close over the years. Historically, fishing and pearl diving sustained the Emirates and the boats and material came from India. There are economic, commercial and cultural connections linking us. We have a long multidimensional relationship, which has so many aspects to it. Historically, this region of the world interacted culturally with India. Moreover, travel and migration for work between the two regions has remained constant over the years. A few decades ago, if anybody from UAE thought of traveling abroad, the number one destination at that time would have been Mumbai, or Bombay. The trade between India and the Emirates were so extensive that the Indian Rupee was the currency in circulation in the UAE before the dirham was introduced. That gives you an idea of the kind of close connections that have existed with these parts and India. In those days, again, if anybody wanted to go abroad for medical treatment, the natural choice was again India. Ask any Emirati where their fathers or their grandfathers went abroad for treatment. They’ll tell you invariably one answer: India.
Where does trade between the UAE and India currently stand?
Last year, two-way trade was USD 75 billion, which at that time made India the largest trading partner for the UAE. From USD 75 billion it came down to USD 60 billion over the last year, which can be attributed to India imposing a 10 percent duty on gold imports from the UAE. India is one of the biggest consumers of gold in the world and the UAE is one of the largest exporters of gold to India, which is why when we introduce a 10 percent duty on gold trade, both imports and exports dropped by USD 15 billion, where USD 10 billion is a decline in exports of pure gold from here to India, and the other USD 5 billion is the decline in the export of jewelry because we import gold from UAE and export jewelry to UAE.
What initiatives have been made between the UAE and India to promote trade?
Earlier this year the governments of India and UAE produced the India-UAE Joint Statement, which reflects the business interest that UAE has in engaging with India and where the countries wish to take their relationship moving forward. The document states that we have targeted increasing our bilateral trade by 60 percent from USD 60 billion over the next five years. Furthermore, UAE will invest in India’s infrastructure. In September 2015 we had a 95-member business delegation representing both Indian and Emirati investment, which was led by the UAE’s foreign minister, H.H. Sheikh Abdullah. Moreover, we had the commerce minister of India come here in October to engage with UAE on investment. India’s finance minister participated in an India-UAE economic forum and met H.H. Sheikh Hamed Bin Zayed Al Nahyan, the managing director of the Abu Dhabi Investment Authority in November 2015.
How is the Indian Embassy promoting trade and investment with the UAE?
There are nearly 1,000 flights every week between India and UAE. Bombay is less than three hours away. Many companies use the UAE as a hub for their engagement with some other countries in other parts of the world, which is why trade and investment will only increase in coming years. Moreover, intensive follow-up is taking place after the India-UAE Joint Statement was published this year, particularly in the oil sector. On all other fronts, we are organizing events to create dialogue and get Indian and Emiratis alike to participate in delegations to promote investment. Our commerce minister was here in October, our finance minister in November and our expert petroleum team will be here—this is an ongoing engagement. We also participated in the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) 2015.
How are you ensuring that trade continues on an upward spiral?
India is not a capital-rich country because we seek capital elsewhere, but if you see India-UAE relations, Indian investment in UAE is far more than UAE’s investment in India. UAE is a capital-rich country, but investment into India is approximately USD 8 billion, while investments from India here have been estimated to be around USD 55 billion. With regards to oil & gas, Indian companies, such as Gulf Petroleum and IL&FS, which have already built substantial storage capacity in the Fujairah, both have operations in the UAE. The UAE is among the top five sources of petroleum for India and because of India’s growing economy and large population there is a huge demand for more. It is also important to note that Indian investment in the UAE covers many sectors. You can see that investment from India covers a range of local sectors ranging from healthcare, education, logistics, tourism, real estate, construction, and even retail. Name the industry and you will likely see Indian investment here, which is of course backed by a local Indian community estimated at 2.6 million people!
As previously mentioned, trade dropped as a result of the 10 percent duty India imposed on gold, but if we remove the duty it will go up again. There is good reason why we want to try to reduce the appetite for gold back home but we would like to diversify the goods we trade between both nations in the coming years.
What opportunities do you see for oil industry investors today from the perspective of Indian nationals looking to do business in the UAE?
There are many opportunities for Indian oil nationals to play a role in Abu Dhabi’s efforts to reach their goal of 3.5 million barrels a day by 2017. India’s participation at the ADIPEC shows our commitment to the industry and to the UAE. Indian companies are already involved in both upstream and downstream activities and we expect to see an increased amount of service providers enter the local industry in the coming years.
Indian companies are also involved in exploration and production and supply the industry equipment necessary across the entire value chain. For example, we have a manufacturing promotion in India called the “Make in India” program, which allows international companies to financially invest and partner with Indian companies involved in sectors required by the oil & gas industry.