In an interview to The Hindu, UAE Ambassador to India Abdulnasser Alshaali says trade is growing, but travel between the two countries is held up by Air Service Agreement impasse. Excerpts:
It was a very short day-long visit by the Prime Minister [Narendra Modi] to Abu Dhabi. Tell us what you think are the big outcomes?
Well, I believe the announcements that came out between the UAE Central Bank and the Reserve Bank of India and an MoU to establish the IIT Delhi-Abu Dhabi university were the main outcomes from the visit. Whenever the two leaders engage, it just speeds up the momentum, and sends a strong message to everyone that this is a great relationship. But there’s always room to do more things together.
President of the UAE Mohammad Bin Zayed will be coming for the G-20 in September to India. Has Prime Minister Modi given a commitment that he would also come to the CoP 28 conference in Abu Dhabi in November?
We haven’t received any written confirmation, yet, that Prime Minister will be able to make it. We did, however, handover a letter to invite Prime Minister Modi and also to President [Murmu].
The rupee-dirham agreement comes at a time when India is facing problems with payments to Russia. Was this discussed during talks and how much do you expect trade to increase as a result of this?
Our conversation was focused on the bilateral relationship, not in any way multilateral or regarding transactions with other countries. It’s not about increasing trade per se, but about making trade easier by lowering transaction costs, making it easier to convert the currency. And that would definitely, as a result, encourage traders to do more business because it’s just much easier to set up their trade in whatever currency that they prefer in India and the UAE.
In the past, India has had such agreements with both Iran and Russia, but practically, they don’t work as it is not always possible to find Indian goods to buy, and the deficit grows. Have you spoken about a way around this?
Well, I believe the technical teams have had conversation on how can they make it easier between the two countries. As I said, the idea is not per se increase trade right away, but to actually have the option to set it in local currencies, to have the right mechanism in place to be able to do that.
In the post Ukraine war sanctions period, we have seen more countries discussing de-dollarisation. Is the India-UAE agreement going to lead to that, and do you foresee more such conversations at BRICS [summit in August], an organisation the UAE wants to join?
Well, there will always be someone trying to politicise anything that happens. This is a purely bilateral matter between the UAE and India. We have decided that we want to make sure that there are more options for traders, exporters, importers to set up their trade. And it’s basically up to them how they want it to work.
In terms of BRICS, and all the other conversations around what is going to be the currency of the future, things are definitely changing. And, you know, at certain point, prices of certain commodities would be quoted in one or two or three currencies maximum. But then as trade expands, as you have an increasing number of trading partners, and those trading partners are using various currencies, including the local currencies, then it’s only expected that this kind of conversation would take place. And countries will continue to see how they can have more synergies of their monetary systems.
There was however, no breakthrough announced on the long-pending issue of the India-UAE Air Service Agreements, and the UAE’s request to be allowed to fly more routes and add more passengers — has there been any movement in the talks?
I haven’t received any written response from this. We want to make things easier, especially for Indians. We do strongly believe that Indians should have the right to be able to travel easier to the UAE and beyond the UAE. However, we are also aware that the second this happens, and we’re talking about the most populous country, prices will double or triple per ticket because the supply is limited at present. So it’s a straightforward economic equation, right? You have limited supply. You try to make travel easier in one way or the other, but when demand increases on very limited stock of or supply of tickets, prices would go up. Another issue is that the UAE wants to be as flexible as possible in our visa regime for Indians, for tourists especially, but if we issue so many visas, we need more flights to carry passengers or prices will skyrocket further. We are ready. We want to have this conversation [on the Air Services Agreement], we want to make travel easier for Indians. But we are waiting to see if someone [Indian government] wants to have this conversation with us.
Why do you think the talks have gone into an impasse?
I’m not quite sure. The Indian aviation industry has been privatised. I understand that there’s a lot of domestic focus, and I know that there are quite a few international airports being built all across the country. I visited 10 States so far, I’ve seen it from myself. And as a result, India would need more flights coming in, will need more handling to take place for those airports to basically pay back what has been invested in them. So one would think that this conversation would take place soon enough so that, you know, we can connect those airline companies with our airline companies and figure out a way forward.
Is there a deadline ?
We have never stopped asking. This is a conversation that takes place everywhere at all kinds of level of government. I don’t think there’s a deadline, but we will continue to want to have this conversation. And what we really want to see is this ease of travel being introduced between the two countries, I really do think that India deserves this kind of connectivity. And we want to make it easier for Indians to be able to travel into the UAE or elsewhere.
India and the UAE are now cooperating on a multilateral level on development cooperation — in the I2U2 or IUSU — why did you feel this was necessary?
It is not being a requirement, but about the fact that we want to do more, not only bilaterally but also multilaterally. So you would see us not only collaborating at the I2U2, but we also have the trilateral with France, we have been cooperating a lot when it comes to the Indian Ocean Association, we have collaborated in the G-20. We have collaborated, when it comes to the Financial Action Task Force and hopefully we will soon be collaborating at BRICS and the Shanghai Cooperation Organisation. So it’s not about it being a requirement as much as we are strategic partners. And it’s only normal for any two strategic partners to explore as many ways of collaboration and cooperation as possible.
Later this year, UAE will host the CoP28 Climate Change conference. How do you see India’s role in helping set up the Loss and Damage Fund?
We want to better understand the positions of various countries. India as a leader of voices in the Global South, the position of India and the position of countries that India can speak to is going to be very important moving forward.
How has the India UAE CEPA, the first FTA signed by India in several years, fared so far?
Well at the moment we stand at U.S.$ 85 billion in bilateral trade, including oil [approx $30 Bn]. Our target for non-oil trade is $100 Bn by 2030. You can see the increase in trade over the past year since the CEPA was signed and implemented. And the last meeting that took place, it was announced that a new mechanism will be established to focus on SMEs, MSMEs and entrepreneurs. I think this is quite important, because it will focus on ways to provide funding for those small and medium businesses, to expand, to scale up, to exports from India to the UAE and to the world.
In the last few years we’ve heard from UAE diplomats, particularly UAE’s ambassador to the U.S., saying that the UAE has played a mediatory role between India and Pakistan. Does that continue? What are your hopes from India-Pakistan relationship, which is right now not moving at all?
Well, it depends on the two countries, for any country to play any kind of role between two other countries, it will have to be based on a request from those two countries. As you know, we have a strategic partnership with India, we have a very good bilateral relationship with Pakistan. And this will continue to be the case.
Is there a mediation process through the UAE at present?
Not that I know of.
Unlike the rest of the Organisation of Islamic Countries, UAE chose to send its top G-20 officials to the G-20 meeting in Srinagar in May. How do you see the situation in Jammu and Kashmir now?
This ties up with the question before this, and how the dynamics between the two countries [India and Pakistan] will play out over the coming few years. What matters to us is we want to make sure that India as a host of the G-20 can see and count on the UAE as a true strategic partner, which is why it’s not just about us being present [at the G-20 meeting] in Jammu and Kashmir, but as also taking part in the other meetings, not only at the official level, but at the ministerial level. And that’s the kind of commitment that we will continue to have towards India.
Is the UAE helping India find a consensus for the G-20 communique, that is stuck over Ukraine issues?
Well, we saw a similar situation happening in G-20 as well last year, and by the end of the day, Indonesia still managed to get a communique out which was acceptable to everyone. I’m very confident that the Indian government will also be able to do so this year, and of course, the UAE will support in whatever way the government needs.
