South Asia Monitor; 23.02.14
[http://southasiamonitor.org/detail.php?type=sarc&nid=7414]
In the popular imagination, two themes dominate the India-UAE politico-economic equation: oil trade and movement of Indian migrants to the West Asian country (and related remittances). While these continue to remain important, various other issues and areas of bilateral economic activity have emerged as significant. The total trade between the two countries is in excess of $75 billion. In December 2013, the countries signed a Bilateral Investment Promotion and Protection Agreement (BIPA). Being seen as a precursor to the India-GCC Free Trade Agreement, the BIPA further opens up avenues for bilateral investments and provides a framework for their protection.
As the two countries expand engagement, two areas that present high potential for bilateral cooperation are clean energy and education. While clean energy provides scope for immense trade and investment related benefits, forays in education need to be pursued not only for economic returns but for return in terms of enhanced cultural capital and public goodwill.
For India, deficient in energy resources and with large swathes of the population without access to lifeline energy, renewable energy holds the key to the provision of decentralized energy solutions. In urban spaces, roof top solar photo voltaic panels, use of solar energy for heating, and waste-to-energy projects can be installed in individual buildings and for servicing communities. The World Bank report of 2013, ‘Paving the Way for a Transformational Future: Lessons from JNNSM Phase1,’ lauded the country’s Solar Mission for upscaling the deployment of solar and bringing down the cost of solar power and calling on stakeholders to devise innovative financing solutions for further growth. The country targets achieving 20,000 MW of solar generation capacity by 2022. The UAE, though bestowed with large fossil fuel reserves, falls short of power (largely natural gas-based) and imports gas to meet its requirements. The country is also keenly aware of the need to reduce its carbon footprint – amongst the highest in the world. The government of Abu Dhabi has set a target of generating 7% of its energy from renewable sources by 2020. The emirate of Dubai targets generating 5% of its energy from solar by 2030. Though the targets seem modest, they are a significant step along the right trail.
As both the countries invest in renewable energy, India’s strong manufacturing base in solar PV modules, and solar thermal systems can be employed for the advancement of renewable energy in both the countries. Pioneered by Masdar, a Mubadala company, the UAE has made strides in clean energy research, training and capacity building, and sustainable built environment solutions. The cutting edge research being undertaken in the cradles of scientific research in India and the UAE provide fertile ground for research collaborations. Launched in April 2012, the Research Centre for Renewable Energy Mapping and Assessment (RECREMA) at Masdar Institute is in the process of developing solar and wind energy resource maps for the UAE. India’s experience of resource mapping can be of assistance to the UAE scientific community and policymakers, and at the same time India can learn from the techniques being used by the UAE.
In education, Indian private players have already registered their presence. Dubai, having adopted a unique model of establishing a free zone for education, has attracted a number of foreign universities to set up campuses in the country. The other emirates, too, host many foreign universities’ campuses. The UAE, characterized by a young demographic profile, is committed to providing sound academic and professional training to its population. Student exchanges and research/teaching partnerships – driven by more than profit alone, between Indian and UAE universities, can go a long way in fostering both academic excellence and cultural exchange. Though setting up Indian universities’ campuses in the UAE is one way to further both economic interaction and people-to-people contact, short-duration exchanges and establishment of collaborative centres in Indian or UAE universities or colleges, too, need to be promoted. Public universities can engage in such programmes, without incurring significant costs, and the Indian diaspora in the UAE would welcome such initiatives.
A Joint Commission at the level of Foreign Ministers and an India-UAE Joint Business Council have been working towards deepening of political, business and cultural ties. With the signing of the BIPA, the UAE government has allocated $2 billion for investments in infrastructure projects in India, adding to its current investments which are to the tune of US$8 billion. Investment deals in ports and power infrastructure are on the cards. Both sides have also committed to resolving impediments around current investments opportunities. Notably, the Jet-Etihad deal is currently under the scanner of the Securities and Exchange Board of India over alleged violation of takeover rules.
The signing of the BIPA has brought a renewed energy to the India-UAE relationship. India’s large and growing market (allied with growing oil demand and business opportunities), and UAE’s emergence as a business hub, bring forth critical business interests. As important strategic and economic players in South Asia and West Asia respectively, India and the UAE can chart a collaborative future for the two ends of the Asian continent.
Diary leaves. And sticky notes for grass. 