The UAE’s Foreign Policy Towards India

Sanford R Silverburg
Professor Emeritus,
Catawba College, Salisbury, NC, USA;
and is the corresponding author.
E-mail: ssilver@catawba.edu

Shadi A Alshdaifat
Assistant Professor,
Public International Law,
College of Law, University of Sharjah, Sharjah, UAE.
E-mail: salshdaifat@sharjah.ac.ae

India’s relation with the United Arab Emirates (UAE) is reasonably well covered in a wide ranging set of literature. The obverse is less so, hence the purpose of this paper is to cover, at least in a fundamental manner, the UAE’s foreign policy toward India. The policy focuses on two elements: labor migration from India to work in the UAE’s burgeoning petroleum industry and to provide the necessary skill set to the country’s developing industrial economy; and the Indian gold market and its export to the UAE, which can be observed in the many gold suqs found throughout the UAE. This is a contributory study on comparative foreign policy and the UAE’s foreign policy toward India.

For every action there is an equal and opposite reaction.

Introduction

India’s perspective on its relation with and foreign policy toward the United Arab Emirates (UAE) is particularly well covered, whether reported under a general heading of Indian foreign relations (Aitchison, 2015; Chakraborty and Deba, 2016; Chatterjee, 2017; Giri, 2017; Josukutty and Prabhash, 2017; Kumar, 2017; Pande, 2017; Shahi, 2017; Sharma, 2017; Singh, 2017; Tremblay and Kapur, 2017; Josukutty, 2018; and Singh, 2018), the Middle East (Ahmed and Kumar, 2016; Pradhan, 2016; and Chatterjee, 2017), or more specifically with the Arab World (Beg, 2017), geographically the Gulf1 and its regional alliance, the Gulf Cooperation Council (GCC) (EXIM Bank, 2006; Malakar, 2006; Jain, 2007; Khosla, 2009; Devare et al., 2013; EXIM Bank, 2013; Dahiya, 2014; Kumaraswamy, 2014; Pasha, 2014a; Pradhan, 2014; Kumaraswamy and Quamar, 2016; and Kumaraswamy and Roy, 2018), specific countries within the region (Sood, 2018), or specific issues dealing with migration (Kumar, 2008; Zachariah and Irudaya, 2009 and 2012; and Sahoo, 2015). However, the reverse is less known, hence the authors’ aim is to compensate for this lacuna, if but only for a portion thereof. The authors focus on two elements of the relationship, namely, the UAE’s policy on migrant workers, and secondly, the importation, sale and tax on Indian gold. We have selected these two variables because they reflect a popular and observable set of phenomena.

UAE’s General Foreign Policy Outlook: National Security and Cooperative Engagement

The UAE’s geographical position astride the Gulf means it must deal with regional actors and the pursuit of their interests, often in conflict with its own as well as involvement with the world powers’ engagement. Given the proximity of Iran as a Gulf littoral state, it represents the greatest possible external military threat to the federation (Davidson, 2009).

The UAE finds itself in the confluence of several regional geo-political systems: the Arab and the Muslim World, the Arabian Peninsula, and the edge of West Asia.

Additionally, the UAE’s geographical position alongside the Gulf means it must deal with regional actors and the pursuit of their interests, often in conflict with its own as well as involvement with the world powers’ engagement. The authors emphasize two components of linkage between domestic and international politics. The premier treatment of the country’s foreign policy (Al-Alkim and Timothy, 1989) puts forth a panoramic view that the country’s diplomacy which has evolved over stages has concentrated on its connection to Iran, Saudi Arabia, and to a lesser extent Palestine. Then on the periphery and of some high priority are the great powers, the United States and the Soviet Union. A more generalized approach is covered by American ambassador William (1997), along with a survey approach found in Davidson (2005).

While the UAE is a traditional Muslim state, and given the overall impression of Islam on political governance, there is nevertheless the positive approach of the government to serve in its role with a more modern template. Hence, a secular component has become a regularized element in the state’s outlook (Roberts, 2016). The UAE’s relationship to world powers has most recently focused on combating international terrorism, but more particularly with regard to the sources of financing of this illegal and violent activity (Ruehsen, 2017).

UAE and India: Another Area of Concern2

The UAE connection to India has a highly visible economic connection, commented upon at various places in this paper. Beyond the fiscal element of the federation’s policy is one of a strategic partnership with the Middle East as a cauldron of terrorism. Both states have agreed on a bilateral stance to provide the necessary strategy to combat terrorism whenever the situation surfaces (Chaudhury, 2015).

For years, the relation between the UAE and India in a time of global uncertainty, resurgence of protectionism, social strife and political flux is an extraordinary one (Sengupta, 2018a and 2018c). This relation is a tribute to the UAE being home to the largest Indian diaspora as well as the decades-old relations between them. In 2017, 13 agreements were signed and are already sprouting, and it is most visible in the area of economic engagement (Sengupta, 2017 and 2018a). Another sector which is set for immense gain from bilateral synergy is space exploration and research. A perfect example of that synergy is the Nayif-1 nanosatellite. As the UAE prepares to launch its ambitious Mars mission in 2021, cost-effective solutions and technology from the Indian space science fraternity will only help fuel its ambitions further (Caline and Naser, 2014; and Sengupta, 2018a). Similar acceleration is expected in a variety of sectors—from maritime cooperation and renewable energy to protection of seafarers, roads, highways and infrastructure (UNCTAD, 2016). The UAE has been as much a victim of terrorist and extremist attacks as India and both nations have therefore found common ground to assiduously build closer cooperation on counter-terror and security—with an increasing frequency of Indian naval ships calling on UAE ports (Sengupta, 2018a).

From a people-to-people perspective, bilateral flights are booming, more steps are being taken to protect the rights of Indian workers seeking employment in the UAE; and the shared cultural heritage of both nations is being strengthened at its core. A new temple in Abu Dhabi for the Indian community is recognition of the UAE’s proud values of tolerance and coexistence3 (Bin Mohammad, 2018).

With all concerns in mind, there is centuries of an old foundation relationship between the people from both countries. One of these relations is the fact that the rupee was the common currency in the Arabian Peninsula between 1959 and 1966; many Emiratis traveled to India for higher studies or medical treatment in Bombay (now Mumbai). Conversely, many Indian traders and entrepreneurs who moved to the UAE in the early 1960s and 1970s now call the country their home and have become part of its social fabric (Sengupta, 2018). Sheikh Zayed the UAE’s founding father who had foreseen the everlasting benefits of closer relations with India even before the official formation of the UAE, said:

Our relations go back some 4,000 years when we had flourishing trade and commerce with India; and now that we are about to be independent, we would like these bonds to be restored and strengthened in every possible way—there are boundless possibilities for trade, commerce, even joint projects (Bin Zayed and Narendra Modi, 2017).

Today, there are other areas of concern which are food security; cooperation in the Indian Ocean region; and the promotion of regional security and stability. The Indian Ocean is today in the throes of competition and conflict, where failed and failing states have bred dangerous forces of discord and destruction. The UAE is already seeking to establish a place for itself in the turbulent region of the western Indian Ocean to forestall attempts to interrupt the free flow of maritime traffic through the Bab El Mandeb strait and choke point by geopolitical adversaries, extremist groups or pirates (Ahmad, 2018).

Another potential area of concern is the defense sector; there is also the opportunity for both countries to work with other like-minded countries to draw the contours of more effective security architecture for the region (Pradhan, 2017; and Janardhan, 2018). India, for its part, already considers the Gulf an extension of its strategic neighborhood and is both willing and able to play the role of a net security provider, including securing energy sea lines of communication from the Gulf to India. The Indian Navy today makes regular ports of call in the region and is involved in anti-piracy operations in the Gulf of Aden (Bowden, 2010; and Joshi, 2017).

UAE Legislation: Migrant Labor

Our approach to the UAE’s policy to allow Indian migrant workers is in part due to the lack of serious attention to its study and certainly as it is reflected as an element of foreign policy (Kamrava and Babar, 2012). For purposes of background (Weiner, 1982; and Looney, 1994), it is necessary to appreciate the alacrity of events serving as a dynamic condition following the discovery of oil in the region in the 1940s (Seccombe and Lawless, 1986)4 which led to a surge in capital accumulation allowing for an extraordinarily per capita income (Rizvi, 1993).

But this financial boom resulted in the need for a pool of required skilled engineering expertise along with related business acumen. Without a sufficient pool of indigenous specialists, reliance on foreign personnel emerged. India, with its large population unable to provide full employment, became a proximate and obvious choice for selection to fill the labor void in the UAE (Halliday, 1977). Over time, the inability to provide the infrastructure necessary to service the labor requirements from within the native population, led to a dependence on foreign, migrant labor (McMurray, 1999) mainly Indian.5 Not to be deterred, the UAE government has pursued a policy of Emiratization, attempting to increase the native population’s participation in the country’s private economic sector (Harry, 2007; Hugo, 2013;

Al-Waqfi and Forstenlechner, 2014; and Yaghi et al., 2014). An essential policy import is the Absher initiative supervised by the UAE’s Ministry of Presidential Affairs and implemented by the Ministry of Human Resources and Emiratization (MOHRE) (Chandra and Gaur, 2015), an effort to employ a greater number of UAE nationals (Bell, 2013; and Al-Ali, 2008). In anticipation of a time, when oil reserves will be expectedly depleted, clean nuclear energy is sought to be the alternative source of energy (Nazzal, 2015). There certainly are regulations purposely developed to cover labor issues under the cover of immigration (Angell, 1986). Here then is a perfect example of linkage politics: India with an under and unemployed population providing the UAE with an available labor pool (Table 1) and the UAE as a host recipient while simultaneously resolving its domestic demands. Not only are Indian immigrants enriched from their employment, but also their families are the recipients of remunerations that cumulatively represent a sizeable figure (Kalyanaraman, 2010).

India’s relations with the UAE also revolve around what it sees as a requirement for its national security interests, namely, a stable and steady source of oil supplies. Labor migration, tied as it is to the oil market, is also reliant on that industry’s revenue, in turn keyed of the market’s oil prices and decisions by the OPEC (Organization of Petroleum UN, Exporting Countries) directorate (Migration, 1986; and Rizvi, 1993).

The current population of the UAE is 9,518,685 as of May 2018, based on the latest United Nations estimates.6 Total labor force (Figure 1) comprises people aged

15 and older who meet the International Labor Organization (ILO) definition of the economically active population: all people who supply labor for the production of goods and services during a specified period. It includes both the employed and the unemployed. While national practices vary in the treatment of such groups as the armed forces and seasonal or part-time workers, in general the labor force includes the armed forces, the unemployed and first-time job-seekers, but excludes homemakers and other unpaid caregivers and workers in the informal sector (Holewege et al., 2014).

The employment is subject to provisions of the Federal Law No 8 of 1980 on the Regulation of Labor Relations (the “Labor Law”).7 But for leaving the country for at least six months before being able to change jobs, it is determined in the Ministerial Order No. 765 for the year 2015.8

UAE Legislation: Gold Importation, Tax and Sale⁹

Any visitor to a capital city or metropolitan area of the region cannot avoid coming into contact with the gold suqs and its jewelry inventory on display. The pervasive opulence is a product of Indian export and UAE import. Gold is an important element within India’s economy for its domestic culture’s absorption and the expected revenue garnered from its export (Reddy, 1996). Some rough data in Table 2 should put the trade situation in a basic context.

Among worldwide importers of Indian jewelry, the UAE ranked 10th for the same period as indicated in Table 2.

Going back to the earliest records, the UAE has been naturally positioned as a hub for international trade between Asia and Europe on an east-west axis and the CIS and Africa on north-south axis.10 Going back even further, as early as 3000 BC, the UAE was rich in natural resources and traded in copper with countries such as Persia and Mesopotamia. With the huge opportunities in its trading location, a number of dominant nations have tried to conquer the area over the years, notably the Portuguese in the 17th century and the Dutch in the 18th century. While both failed, the British did succeed in controlling part of the region during the 18th century (Johnson, 2018).

The regional discovery and export of oil came in 1962. Another major trading milestone came in the early 1960s, when at that time Sheikh Rashid Bin Saeed Al Maktoum, the Ruler of Dubai, had the vision of dredging Dubai Creek to allow large shipping vessels to enter. By 1972, Port Rashid opened followed in 1985 by Jebel Ali Port, the UAE’s first free trade zone. Today, the UAE remains a vital re-export point between east and west. The GCC’s expansive coastline, stretching from the Gulf of Oman to the east and the Arabian Gulf to the west, led to the development of a number of strategic ports over the years. The Strait of Hormuz still provides a passage for more than 40% of the world’s crude oil. With ongoing developments and central logistics hubs such as Kizad, part of Abu Dhabi Ports Company, and Dubai World Central, the UAE continues to grow its imports/exports capabilities, firmly positioning itself as a global logistics hub (Sundarakani, 2017).

Importation is the process of bringing goods into the UAE from a foreign country, from one of the Emirates’ free trade zones, or vice versa into a free trade zone from a UAE ‘onshore’ location while meeting the country’s legal requirements in terms of licensing, documentation and permissions. This last point about licensing is important to allow you to be an importer. It includes having a valid trade license issued by a UAE license issuing authority and being registered with the customs department.11

The connection between the UAE and India predates the creation of their respective sovereign states status. Indeed, preceded by centuries, there was a maritime relationship; based upon trade, going both ways (Daryaee, 1985; Pearson, 1988; Sidebotham, 1991; Hourani, 1995; and Kumar, 2012) was an established condition. The sea-going mission is a current operation as well.12 In spite of the different cultural settings for both political systems—the UAE, a Muslim culture and India, with a predominantly Hindu populace—the relationship transcends the potential cross-cultural barrier to establish a healthy condition based on trade and an increased mutual concern with violent threats in its variant forms but focusing on terrorism.

Conclusion

Little has been written on the UAE’s policy toward India, now awakened to a small degree. Not only was the political relationship examined, but also the importance of the economic foundation thereof. The cross-cultural communication pattern is also something that cannot be discounted. The UAE has been able to marshal its financial assets to serve its national needs while providing a much-needed service to a regional neighbor and strengthen their mutual concerns.

1. For reference purposes, the term “the Gulf” will be employed to avoid any issue of conflict.
2. For basic historical coverage see Azhar (2003a and 2004b); Embassy of India (n.d), available at http://www.indembassyuae.org/induae_bilateral.phtml; Embassy of UAE (n.d), available at http: // www.uaeembassy-newdelhi.com/uae-indiarelations_index.asp; and Hussain (2013).
3. Policy Planning and Research Division, Annual Report, 2013-2014, Ministry of External Affairs (2014), New Delhi, India.
4. See this source for the background to the role of Indian labor in the Gulf during the early part of the 20th century.
5. For an appreciation of the Indian economic perspective see Kumar (2017).
6. World Meters (2018), UAE, 2018, Dubai, available at http://www.worldometers. info/world-population/united-arab-emirates-population/
7. United Arab Emirates, Federal Law No. 8 of 1980 Regulating Labour Relations as Amended by Federal Laws Nos. 24 of 1981, 15 of 1985 and 12 of 1986.
8. United Arab Emirates, Ministerial Decree No. 765 of 2015.
9. For general background see Kumar (2016).
10. United Arab Emirates, UAE Imports and Export Guide: (2017), p. 13, Ministry of Economy, Abu Dhabi.
11. Ibid.
12. “Indian Warships in Persian Gulf”, Times of India, September 12, 2004, available at http://timesofindia.indiatimes.com/articleshow/indian-warships-in-persian-gulf. 848249.cms

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