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EDITORIAL ANALYSIS: Modi’s two Summits: UAE trumps G7

 Source: The Hindu

  • Prelims: Current events of international importance, India-UAE relations, G7 etc.
  • Mains GS Paper II: Significance of UAE for India, Bilateral, regional and global grouping and agreements involving India or affecting India’s interests.



  • The Prime Minister of India is attending two summits this week – he is a special invitee’ at the 48th G7 Summit at Schloss Elmou in Germany.
  • After the G7, he has a bilateral summit in Abu Dhabi with the UAE President.
  • According to Foreign Direct Investment data, the UAE invested more in India in 2021 than Germany and France combined.
  • Unlike the UAE, none of the G7 countries has yet signed a bilateral Comprehensive Economic Partnership Agreement (CEPA) with India.





Group of Seven (G7):

  • It is an intergovernmental organization that was formed in 1975.
  • The bloc meets annually to discuss issues of common interest like global economic governance, international security and energy policy.
  • The G7 countries are the UK, Canada, France, Germany, Italy, Japan and the US.
  • All the G7 countries and India are a part of G20.
  • The G7 does not have a formal constitution or a fixed headquarters.
  • The decisions taken by leaders during annual summits are non-binding.


Major purpose of the G-7:

  • It is to discuss and deliberate on international economic issues.
  • It sometimes acts in concert to help resolve other global problems, with a special focus on economic issues.


India and G7:

  • India is a natural ally for the G7 countries in defending the shared values from a host of threats stemming from authoritarianism, terrorism and violent extremism, disinformation and economic coercion.
  • Expressed concerns that open societies are particularly vulnerable to disinformation and cyber-attacks.
  • It sought the support of the grouping to lift patent protections for Covid-19 vaccines in 47th Summit.
  • Planet’s atmosphere, biodiversity and oceans cannot be protected by countries acting in silos, and called for collective action on climate change.
  • India is the only G-20 country on track to meet its Paris commitments.
  • Developing countries need better access to climate finance, and called for a holistic approach towards climate change that covers mitigation, adaptation, technology transfer, climate financing, equity, climate justice and lifestyle change.
  • Highlighted the revolutionary impact of digital technologies on social inclusion and empowerment in India through applications such as Aadhaar, Direct Benefit Transfer (DBT) and JAM (Jan Dhan-Aadhaar- Mobile) trinity.


India and UAE:

  • India and the UAE established diplomatic relations in 1972.
  • The greater push has been achieved in bilateral relations when the visit of India’s Prime Minister to the UAE in August 2015 marked the beginning of a new strategic partnership between the two countries.
  • Further, during the visit of the Crown Prince of Abu Dhabi to India in January 2017 as the chief guest at India’s Republic Day celebrations, it was agreed that bilateral relations were to be upgraded to a comprehensive strategic partnership.
  • This gave momentum to launching negotiations for an India-UAE comprehensive economic partnership agreement.



India-UAE synergy:

  • The current IndiaUAE synergy and amity are largely due to Prime Minister Modi’s tending.
  • This would be his fourth visit to Abu Dhabi and sixth summit with Sheikh Mohammed over the past seven years.
  • The visits have plenty to show — from Emirati investments in Jammu and Kashmir to a CEPA.
  • The Abu Dhabi summit would be a useful opportunity to recalibrate the bilateral ties and open new vistas following the operationalisation of the bilateral CEPA from May 1.


Changes since the pandemic:

  • The bilateral trade grew by 68% in 2021-22 to $72.9 billion, a new record.
  • While both exports and imports grew, the trade deficit reached $16.8 billion,also a new record.
  • Due to CEPA, the robust economic revival, higher oil prices and larger Indian imports, trade is likely to grow even higher in 2022-23.
  • The corrective mechanism built into CEPA would, hopefully, prevent the deficit from going out of hand.
  • As the UAE collects petrodollars, India, the world’s fastest growing major economy, could be a lucrative market for investments in areas such as petrochemicals, pharmaceuticals, renewables, infrastructure,manufacturing, logistics, startups, etc
  • streamlining of the manpower sector, including skilling the young Indian labour force to suit the Emirati requirements.
  • The two sides can collaborate for the eventual reconstruction of the war ravaged regional countries such as Yemen, Syria, Somalia, Iraq, Libya and Afghanistan.
  • In the bilateral political domain, the two sides have cooperated efficiently on security and anti-terrorism, but they need to do more to fight money laundering and the flow of illicit narcotics.


Complexity in UAE’s position:

  • The UAE has disrupted the long standing Arab Israeli stalemate by normalizing relations with Israel in 2020.
  • The two sides have recently signed a bilateral CEPA.
  • After pursuing a muscular regional foreign policy against political Islam and in regional hotspots such as Syria, Yemen, Libya, Sudan, and Somalia, Abu Dhabi seems to have decided to stage a phased withdrawal and improve ties with Syria,Qatar and Turkey.
  • The ties with Saudi Arabia remain somewhat edgy, due to policy divergences and economic competition.
  • Similarly, Abu Dhabi has developed some ruction with the Biden presidency in the U.S. and is diversifying its strategic options with Russia and China.
  • It has conspicuously ignored the plea by the U.S. and other Western countries to raise its oil production.


Comprehensive Economic Partnership Agreement (CEPA):

  • India-UAE CEPA was signed on 18th February 2022, during the India-UAE Virtual Summit.
  • The Agreement entered into force on 1st May 2022.
  • CEPA provides for an institutional mechanism to encourage and improve trade between the two countries.


Salient features of CEPA:



Way Forward

  • Manifold Benefits of India-UAE Trade Agreements: With India’s newfound strength in exports, a trade agreement with an important country such as the UAE would help sustain the growth momentum.
  • As we are witnessing a big turnaround in manufacturing, the UAE would be an attractive export market for Indian electronics, automobiles, and other engineering products.
  • As both the UAE and India are aggressively pursuing FTAs with several important countries, not only companies from these two countries but also MNCs from other geographies too would find the UAE and India an attractive market to invest in.
  • In the bilateral political domain, the two sides have cooperated efficiently on security and anti-terrorism, but they need to do more to fight money laundering and the flow of illicit narcotics.
  • India, the UAE’s second largest trading partner, and largest source of tourists and manpower, can be a useful ally.
  • The Abu Dhabi summit would be a useful opportunity to recalibrate the bilateral ties and open new vistas following the operationalisation of the bilateral CEPA.
  • The G7 countries are also important players in global trade. The US and Germany in particular are major export nations. Both sold goods worth well over a trillion US dollars abroad in 2021.



The UAE was a bigger investor in India in 2021 than Germany and France combined. In the light of this statement discuss the India-UAE trade relations.

(200 WORDS, 10 MARKS)