Modi's UAE visit: bilateral trade to be top of agenda
Energy sector and increase in bilateral trade is likely to be on the agenda of Narendra Modi as he begins his two-day visit to the UAE from August 16. The bilateral trade between the two countries stands at $60 billion (Dh220 billion) for the year 2014-15. India is the largest trading partner for the UAE with over $28 billion in non-oil trade.
Though there is not much direct investment by India into the UAE energy sector, it might try to increase its presence, Robin Mills, Head of Consulting at Manaar Energy in Dubai said. He said the UAE renewable energy sector is a potential area due to the expansion of Indian solar power companies.
According to Mills, Indian infrastructure, ports and energy are all priority sectors requiring investment, where the UAE may seek to be involved. "The Indian gas production and power generation are possible areas for companies such as Mubadala, International Petroleum Investment Company (IPIC) and Taqa," he said.
According to details furnished by the Indian Embassy, Abu Dhabi's National Petroleum Construction Company has won a major engineering and construction contract to build offshore platforms from India's Oil and Natural Gas Corporation (ONGC) valued a Dh550 million.
Abu Dhabi National Energy Company (Taqa) is operating a 250 Mega Watt lignite power plant in Tamil Nadu and it has plans to expand it with an investment of around $ 250 million. Mills said India may not be looking to increase its import of crude from the UAE because of its complex refineries but may seek cooperation in strategic oil storage.
chief investment officer at National Bank of Abu Dhabi said there are significant opportunities for investment in the infrastructure in India. "India is clearly targeting foreign capital to help fund some very substantial projects from port development to road building and energy," he said.
"The opportunities for the UAE sovereign wealth managers could be substantial as interest rates in India are significantly above international norms and hence will help to inflate prospective returns from infrastructure to the 15-20 per cent range."
India needs capital to develop its domestic infrastructure and is looking to significantly increase its exports. "The UAE is a natural partner on both fronts." Indian Business and Professional Council President Kulwant Singh said increasing bilateral trade would be on top of the agenda for Modi.
"There might be an effort to implement the bilateral investment protection and promotion agreement so that the UAE investments in India could be protected and safeguarded." The agreement was signed in 2013, but is yet to be implemented fully. "This is required to avoid some bad experiences which UAE companies had in India."