Modi's UAE visit: bi­lat­eral trade to be top of agenda

The Pak Banker - - BUSINESS -

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.

Gary Du­gan,

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."

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