New Delhi, Aug 16 (IANS) The importance of Prime Minister Narendra Modi’s visit to the UAE, the first after Indira Gandhi’s in 1981, can be gauged from the Gulf nation’s place in India’s energy security as the sixth largest import-source of crude oil in 2014-15.
“The Gulf region is vital for India’s economic, energy and security interests,” Modi told the Khaleej Times in an interview.
Bilateral trade has grown significantly from a level of $180 million in the 1970s to around $60 billion per annum now, making the UAE India’s third-largest trading partner for 2014-15 after China and the US.
Modi’s visit, external affairs ministry sources said, will focus on attracting investment by the United Arab Emirates'(UAE) massive oil-financed sovereign wealth fund that for Abu Dhabi is reported to be worth over $800 billion.
Meanwhile, plunging global crude oil prices that have again dropped below the psychological $50-a-barrel mark this year have forced the UAE government to cut down on subsidies and deregulate petrol and diesel prices last month, resulting in an increase by 24 percent in the price of petrol to $0.58 per litre.
The troubles from falling oil prices indicate that the six-member oil rich Gulf Cooperation Council (GCC), of which the UAE is a member, is starting to feel the pinch, according to Amit Bhandari, a fellow at the Mumbai-based foreign policy think-tank Gateway House.
“The GCC accounts for just over 16 percent of India’s exports, including discretionary items such as gems and jewellery. Weak GCC economies can hurt Indian exporters and spell trouble for Indian banks,” Bhandari said.
He pointed out that during the 2008 economic crisis, activities such as construction came to a halt in Dubai, rendering thousands of Indian workers jobless.