New Delhi: India and the United Arab Emirates (UAE) are engaged in technical discussions to finalise a rupee-dirham arrangement for trade in order to boost commercial ties following the signing of a free trade agreement, UAE ambassador Abdulnasser Jamal Alshaali has said.
The UAE is keen on revisiting the bilateral arrangement for flights to help bring down airfares, Alshaali said in an interview. Space, defence, food and energy security, pharmaceuticals and health care are areas the two nations will focus on within the framework of last year’s comprehensive economic partnership agreement (CEPA) to boost trade, he said.
Responding to a question on Pakistan Prime Minister Shehbaz Sharif’s remarks about asking the UAE to help build a bridge with India, Alshaali said his country has “played such a role in the past”, but future endeavours in this regard will depend on both India and Pakistan.
Asked about the progress on the rupee-dirham arrangement, Alshaali replied: “The technical conversation is ongoing. There has been an agreement to settle a certain (amount) of trade between the two countries…(This) is an ongoing conversation at the technical level and how they can proceed with it. We also have the remittance facility to make it more direct and easier. There’s still technical issues to be discussed and agreed on.”
With non-oil bilateral trade currently worth $44 billion and the two countries setting a target of $100 billion for 2027, Alshaali said the UAE wants to invest in sectors important to both countries. “We want to make sure we expand aviation ties, we want to invest in food security and by extension, food park projects in different states,” he said.
In the context of the UAE’s long-standing request to revisit the bilateral flight arrangement, Alshaali said both sides had “maxed out” their rights and more flights and additional destinations in India are needed to drive down airfares.
“The UAE airlines have maxed out, Indian airlines have maxed out and you can see it from the prices. If you check the price of a ticket today, it’s more than 50% higher than it used to be a few years back…That’s already a market signal which we need to pay attention to because we are talking about this entire relationship, and aviation is a crucial point in expanding this relationship,” he said.
There is an ongoing conversation on the UAE side’s request to fly to additional Indian destinations. “…the aviation sector in India has been going through privatisation. There are all kinds of agreements happening and we understand that, but this is something important for both markets because otherwise I don’t see how prices are going to go down anytime because it’s a simple demand-supply question,” he added.
Under the new India-Israel-UAE-US or I2U2 grouping, the UAE is looking to invest in food parks and a renewable energy project in Gujarat to boost the country’s food security.
“The Gujarat government shared a proposal on specific food commodities and their levels of production and those were shared with (the holding company) ADQ on the sidelines of the I2U2 Business Forum (held) in Abu Dhabi last week. There was also a conversation between ADQ and officials from Gujarat,” Alshaali said.
The UAE is also focusing on complementarities between its COP28 presidency and India’s G20 presidency, especially in renewable energy. The UAE is among nine guest countries invited by India for the G20.
“In terms of COP28, the main focus we have at the moment is how can we find areas of cooperation and expand on them that overlap between the G20 and the COP28 presidency. We’re supporting India’s presidency and…obviously we can count on India’s support in the COP28 presidency as well,” Alshaali said.
Asked about reports that the UAE had helped reduce tensions between India and Pakistan during the 2019 Pulwama crisis and Prime Minister Sharif’s remarks about seeking the UAE’s help to bring the two countries to the negotiating table, Alshaali said: “So our relationship is good both ways, right? And we have played such a role in the past, but again this is going to be up to both countries and whether this is something that they would want us to do or not.”
