India, UAE sign bilateral investment agreement during PM Modi's visit

Framework on proposed IMEC also signed

India and the United Arab Emirates (UAE) on Tuesday signed a key bilateral investment treaty along with key agreements spanning a slew of fintech and digital infrastructure projects announced during Prime Minister Narendra Modi's two-day visit to the Gulf nation.

The bilateral investment treaty is set to be a key enabler for further promoting investments in both countries, the Prime Minister’s Office (PMO) said in a statement.

“The treaty will have a long-term impact. It will also be major news for G-20 nations,” Modi said during his meeting with UAE President and Ruler of Abu Dhabi, Mohamed bin Zayed al Nahyan.

The UAE is the seventh-largest source of historical Foreign Direct Investment (FDI) for India, with a total of $16.67 billion.

It constitutes 2.5 per cent of India's overall inbound FDI originating from the country since 2000, according to data from the Department for Promotion of Industry and Internal Trade.

FDI from the country swelled to $3.35 billion in FY23, up from $1.03 billion in FY22.

It stood at $1.1 billion in the first six months of the current financial year.

India signed the Comprehensive Economic Partnership Agreement with the country in February 2022, which went into effect in May 2022.

The UAE has become India's second-largest export destination, and the third-largest trading partner with total trade touching $85 billion.

Both sides also signed an Intergovernmental Framework Agreement on the India-Middle East Economic Corridor (IMEC). This would build on the previous understandings and cooperation on this matter and further regional connectivity, the PMO said.

The IMEC initiative calls for a sea-land connectivity project linking India with West Asia and Europe in an apparent move to counter the controversial Belt and Road Initiative of China.

It calls for a railway that, upon completion, will provide a reliable and cost-effective cross-border ship-to-rail transit network to supplement existing maritime and road transport routes – enabling goods and services to transit to, from, and between India, the UAE, Saudi Arabia, Jordan, Israel, and Europe.

Fintech focus

Both sides also inked an agreement on the interlinking of national instant payment platforms.

As a result, India's United Payment Interface will be linked with the UAE's Aani, a platform operated by Al Etihad Payments, a subsidiary of the country's central bank.

Similarly, an agreement on inter-linking domestic debit/credit cards of both nations was signed which will see RuPay (India) linked with JAYWAN (UAE). The move is set to enhance the universal acceptance of RuPay across the UAE.

An MoU on cooperation in Digital Infrastructure Projects promises to create a framework for wide-ranging cooperation, including investment cooperation, in the digital infrastructure sector and also facilitate the sharing of technical knowledge, skills, and expertise.

The latest visit is the PM's 7th to the UAE and the fifth meeting between Modi and al Nahyan in the last 8 months. The PM also inaugurated the country's first Hindu mandir in Abu Dhabi, constructed by the BAPS Swaminarayan Sanstha.

He will be speaking as the Guest of Honour at the World Government Summit, an annual event in Dubai, which brings leaders in government for a global dialogue about governmental process and policies with a focus on the issues of futurism, and technology innovation, the MEA said.

PM Modi will be visiting Qatar on Wednesday. The surprise visit was announced on Monday, hours after seven of the eight Indian Navy personnel facing the death penalty on espionage charges in Qatar, arrived in New Delhi.