Modi Eyes UAE’s $1.3 Trillion Sovereign Funds; Offers $1 Trillion Investment Opportunity

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Prime Minister Narendra Modi with Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan in Abu Dhabi.
Prime Minister Narendra Modi with Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan in Abu Dhabi.

ABU DHABI (BE2C2 report) — Indian Prime Minister Narendra Modi said on Monday there is an immediate investment opportunity of $1 trillion in India including “Make In India” opportunities for the UAE investors and business houses.

Addressing an investors meet in Masdar City, a zero-carbon city here, Modi said his government’s immediate priority would be to kickstart the things which were stalled by the “indecisiveness and lethargy” of past governments.

Modi’s visit is the first in 34 years to UAE by an Indian Prime Minister. Indira Gandhi was the last Prime Minister to visit the emirates in 1981.

Modi said though there are 700 flights between India and the UAE but it took 34 years for an Indian Prime Minister to visit, adding: “I promise this will not happen again.”

“On one hand India is growing fast and on the other hand, the world is looking at Asia. But is Asia complete without UAE? I can clearly see that the UAE should be at the centre of mainstream of things in Asia. UAE’s power and India’s potential can make it Asia’s century,” he said.

Some 2.6 million Indians make up 28% of UAE population — the largest expat community in the emirates and remit over $16 billion every year. Modi has called it “Mini India” during his visit.

MODI-MEETS-UAE-INVESTORS

For obvious reasons, UAE is very high on the Indian prime minister’s radar screen. So is UAE’s vast resource of sovereign investment funds.

Abu Dhabi, the UAE capital where Modi began his visit, has a sovereign wealth fund of about $800 billion. This fund is parked with the Abu Dhabi Investment Authority.

Dubai, where Modi was on Monday, has a similar fund with Dubai Investment Authority boasting of around $500 billion in its kitty. Put together, the two sovereign wealth funds amount to a staggering $1.3 trillion.

Not many countries in the world can boast of this kind of whopping sum set aside solely for the purpose of investment.

However, analysts say Modi may not be able to get a slice of the cake of UAE’s funds because of inherent structural weaknesses in Indian taxation and investment climate.

A Who’s Who of UAE Business — UAE and Indian industrialists based in the emirates come together for the investors meet. A wall to wall media coverage in the UAE Press on Modi’s visit highlights its importance as both countries enter talks of strategic partnership now.

Presently, UAE is India’s biggest investor with total FDI from UAE to India pegged at three billion dollars.

The traditional Silk Route extended 4000km across an extensive transcontinental network.

The traditional Silk Route extended 4000 km across an extensive transcontinental network.

Modi’s bilateral trip to UAE comes two months after China and UAE high officials met (in June) and agreed to pursue strategic partnership and tap into opportunities available to both in Beijing’s ambitious Belt and Road Initiative.

The UAE has also put forward a plan to rejuvenate the ancient business route passing through the Middle East and connect it with China initiative.

According to observers, Modi’s trip is an attempt to join the bandwagon — as China and Pakistan together move forward with the $46 billion China-Pakistan Economic Corridor.

According to reports, Modi will be visiting Saudi Arabia in near future and though, as of now, a visit to Kuwait does not seem to be in the works, but Kuwait too may be roped in his itinerary in coming months, it has emerged.

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