Pressing of palms is at the heart of UAE-India ties

Reuters/ANI

In 1672, John Fryer, an English physician, noticed that Gujarati merchants had developed a sign language to work with foreign traders speaking different tongues. Sizeable Silk Road deals were struck by a simple bringing together of palms.

This accommodative mercantile ethos influenced relationships throughout the region and beyond – and it still does. A visit this month gave a clear reminder that trade is at the heart of UAE-India relations.

More than 350 years after Fryer’s visit, the president of the UAE, Sheikh Mohamed bin Zayed Al Nahyan, joined the prime minister of India, Narendra Modi, to address the three-day Vibrant Gujarat Global Summit. While there was much pressing of palms, the deepening strength of the UAE-India trade partnership was made loud and clear.

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In their fourth meeting in less than seven months, the leaders hailed their countries’ rapidly transforming relationship and reaffirmed their commitment to a shared and prosperous future.

The second anniversary of the nations’ comprehensive economic partnership agreement (Cepa) is approaching and the commitment to boost bilateral trade to $100 billion by 2027 was reaffirmed. Between April 2022 and March last year, UAE-India trade hit $84.5 billion.

The relationship is deepening on several important levels. Last year India hosted the G20 summit, inviting the UAE as a special guest. It is also a founding member of the Brics grouping, which expanded to include the UAE as a full member on January 1.

This builds on long-established strategic relations rooted in cultural, people-to-people and economic ties that have developed over generations. Standard Chartered has operated in India for more than 170 years and in the UAE for more than 65, so we have witnessed this first hand.

In 2017, the UAE-India trade relationship was formally elevated to a comprehensive strategic partnership during the visit of Sheikh Mohamed to New Delhi as chief guest at India’s Republic Day ceremony.

Today, the UAE-India trade relationship is even stronger and broader, as evidenced by the 3.1 million Indian tourists visiting the UAE in 2022 and the numbers of Indian and UAE companies operating in both countries.

The UAE now hosts more than 83,000 Indian companies, while India is seeing a steady increase in the number of Emirati companies active in strategic sectors. FDI Markets, the online database of cross-border investments, says that since 2003, 217 UAE firms have invested in India and 698 Indian companies have invested in the UAE.

Building on these firm foundations, the Cepa came into force in May 2022. Modi’s visit to Abu Dhabi last July was accompanied by an inaugural dirham-rupee trade agreement. Its benefits include easier cross-border trade payments, with lower transaction costs.

A UAE importer will be able to make payments in dirhams at market exchange rates, and vice versa for Indian companies, without having to go through currency exchanges.

New trade and investment opportunities are increasingly clear. The UAE was the fourth-largest investor in India in 2022/23, a significant rise from seventh position a year earlier.

The Abu Dhabi Investment Authority has announced plans to establish a presence in Gujarat International Finance Tec-City, India’s first financial services special economic zone, to facilitate further funding opportunities.

There are now more than 1,800 flights a month from the UAE to India by Emirati national carriers, increasing connectivity.

Sheikh Mohamed was accompanied on his visit to Gujarat this month by a high-level delegation of UAE figures. Modi inaugurated the UAE pavilion at the summit – an event attended by a large number of business leaders and private sector representatives.

Accompanying the diplomatic spectacle, practical progress was also made, including a website that aims to encourage co-operation between SMEs and starts-ups. DP World plans to invest $3 billion in the development of ports, terminals and economic zones in India.

The UAE Ministry of Investment has signed three memoranda of understanding with India, setting out frameworks for the expansion of bilateral investment co-operation in the renewable energy, food processing and healthcare sectors.

John Fryer might have recognised the mercantile ethos that underpins today’s UAE-India relationship. He would surely be impressed by all the positive palm pressing.

Sunil Kaushal is regional CEO, Africa and Middle East, at Standard Chartered