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On the face of it, Prime Minister Narendra Modi has pulled off a feat which none of his predecessors could: extracting a pledge from a foreign country to invest $75 billion in India. This is the most concrete outcome of his two-day visit to the United Arab Emirates (16-17 August).

But on the flip side, one has to wait and watch to see the broad contours of the UAE’s proposed investment in India. Moreover, one doesn’t know the status of similar investment pledges by Japan and China eleven months ago wherein the two Asian giants had announced to invest $35 billion and $20 billion respectively in India.

The India-UAE Joint Statement released on Monday evening touches upon the proposed $75 billion investment from UAW to India but does not give details or the timeline of the proposed investment.

The Joint Statement talks about as many as 31 areas of broad convergence between India and UAE, including the two sides’ decision to elevate their bilateral relationship to a comprehensive strategic partnership and cooperate in manufacture of defence equipment in India, veritably winning the UAE’s support for PM Modi’s Make in India initiative.

But undoubtedly the most important of all the 31 agreements between Modi and his UAE interlocutors as reflected in the Joint Statement is the point about $75 billion UAE investment in India. Here is the relevant paragraph: "Recognising that India is emerging as the new frontier of investment opportunities, especially with the new initiatives by the Government to facilitate trade and investment, encourage the investment institutions of UAE to raise their investments in India, including through the establishment of UAE-India Infrastructure Investment Fund, with the aim of reaching a target of USD 75 billion to support investment in India's plans for rapid expansion of next generation infrastructure, especially in railways, ports, roads, airports and industrial corridors and parks."

While the news is absolutely welcome and heart-warming, the devil lies in the details and there aren’t any as of now. No timeline is given as to by when the $75 billion investment would come to India from the UAE and what will be the pre-conditions.




After all, don’t we know the fate of the South Korean steel giant POSCO which pledged to pour $12 billion in India’s single biggest FDI project way back in 2005 but had to suspend the project a decade later in view of enormous difficulties faced in implementing the project?

One must remember that this is only a statement of intent and one has to wait to see the UAE money actually arriving in India for infrastructural projects in the sectors named above. This may take months and even years. The probable difficulties were pointed out in an earlier Firstpost article.

Therefore, the Indian government must learn its lessons from the POSCO fiasco and not jump the gun by trumpeting its achievement of getting the UAE to pledge investments in India up to $75 billion till the finer details are put in public domain and the first tranche of investment comes to India.

However, PM Modi needs to be congratulated for injecting a new life into the India-UAE relationship and putting UAE on its front burner, its rightful place. Consider the following achievements, mentioned in the India-UAE Joint Statement:

• Establish a dialogue between their National Security Advisors and National Security Councils. The National Security Advisors, together with other high level representatives for security from both nations, will meet every six months. The two sides will also establish points of contact between their security agencies to further improve operational cooperation.

• Strengthen defence relations, including through regular exercises and training of naval, air, land and Special Forces, and in coastal defence. India warmly welcomed UAE's decision to participate in International Fleet Review in India in February 2016.

• Denounce and oppose terrorism in all forms and manifestations, wherever committed and by whomever, calling on all states to reject and abandon the use of terrorism against other countries, dismantle terrorism infrastructures where they exist, and bring perpetrators of terrorism to justice.

• Enhance cooperation in counter-terrorism operations, intelligence sharing and capacity building.

• Work together for the adoption of India’s proposed Comprehensive convention on international terrorism in the United Nations.

• Work together to control, regulate and share information on flow of funds that could have a bearing on radicalization activities and cooperate in interdicting illegal flows and take action against concerned individuals and organizations.

• Strengthen cooperation in law enforcement, anti-money laundering, drug trafficking, other trans-national crimes, extradition arrangements, as well as police training.

• Promote cooperation in cyber security, including prevention on use of cyber for terrorism, radicalization and disturbing social harmony.

• Establish a Strategic Security Dialogue between the two governments.

• Facilitate participation of Indian companies in infrastructure development in UAE.

• Promote strategic partnership in the energy sector, including through UAE's participation in India in the development of strategic petroleum reserves, upstream and downstream petroleum sectors, and collaboration in third countries.