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Department of Economic Development Report stresses solid bilateral relations between India and the Emirate of Abu Dhabi

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Department of Economic Development Report stresses solid bilateral relations between India and the Emirate of Abu Dhabi

Thursday, October 20, 2011 News
The UAE and particularly the Emirate of Abu Dhabi maintains solid and close and deeply rooted historical ties with the Republic of India, characterized by consonant understanding between the two countries at both official and public levels. This relationship is based the on common cultural and social values, shaped over decades of understanding and convergence of political and economic common interests.The report prepared by the Studies Directorate of the Department of Economic Development in Abu Dhabi, on the sidelines of Abu Dhabi Investment Forum Mumbai - India, Abu Dhabi  which convenes  today  October 20,2011,  indicated that the importance of relations between the UAE and India   stresses two crucial points: the first; is that Indian labor is most prevalent in the State, in addition to the huge financial transfers of Indian expats; the  second,  is that India's economic growth depends on the continued supply of energy from the Gulf at reasonable prices. The report recommended encouraging furtherance of economic activity between the two countries, so as to achieve common interests, particularly in areas of industrial investment, real estate, information technology, in addition to strengthening and promoting cooperation with India in areas of infrastructure, services, energy, health and technology.The report stressed the importance of encouraging and more strengthening of direct trade and economic relations between Indian and UAE companies, and to promoting cooperation between the Chamber of Commerce and Industry and the Federation of Indian Chambers of Commerce, in addition to the intensification of contacts between businessmen in both countries. The report stated that there is a set of bilateral agreements  concluded between the UAE and India, the most important  are the agreement on the avoidance of double taxation and prevention of fiscal evasion on income tax in 1992, the framework agreement for the development of industrial relations in 2007, the Protocol amending the agreement signed in 1992 on avoidance of double taxation and the prevention of fiscal evasion with regards to income tax in 2007, an agreement  concerning real estate worth more than $ 20 billion in 2007, in addition to five memoranda of understanding in various areas, and  a security cooperation agreement to create an institutional framework between the two countries in combating all forms of terrorism, in 2009.Within the of the framework of the negotiating team of the Gulf Cooperation Council (GCC), the UAE, in the is currently conducting exerting joint  efforts  to  conclude many  the agreements to liberalize trade with a number of countries including India. The report highlighted the commercial relations between the Emirate of Abu Dhabi and India, pointing out those total imports of the Emirate of Abu Dhabi from India in 2010, exceeded AED 1.7 by 2% of the total imports to the emirate, , ranking India as thirteenth among exporters to the emirate. The report indicated out that India is one of the main trading partners of the Emirate of Abu Dhabi in the field of exports (non-oil commodities), where exports total in 2010 exceeded SED 434 million, by 3.74% of total exports. Total re-exports of the Emirate of Abu Dhabi to India in 2010 amounted to AED 643 million, constituting 5.85% of the total re-exports.As for investment relations, the report of the Studies Directorate of Department of Economic Development revealed that the relations between the Emirate of Abu Dhabi and India have witnessed important developments, where investment opportunities increased along with the steady growth in trade relations. The report pointed out that the value of Indian investments in the Emirate of Abu Dhabi is estimated at AED 123 million, which comprise 0.24% of total foreign investments in Abu Dhabi by country of origin.The report added that the number of Indian companies operating in the Emirate of Abu Dhabi stands around 600 companies out of 8900 Indian companies operating in different emirates.  Dubai hosts of about 6000 Indian companies, while 1800 companies operate in the Emirate of Sharjah and 500 companies in the Jebel Ali Free Zone. All this reflects the interest of businessmen and investors in both countries to strengthen cooperation and partnership; and shows the increase in the active participation of the Indian community in Abu Dhabi and other Emirates, where the number of Indian workers and expats in UAE   exceeds 1.5 million. The report stated that the amount of money transferred by Indian workers in UAE to India ranged between 10 and 12 billion dollars in 2008-2009, accounting for about one third of all transfers sent out of the GCC countries.Regarding investment projects of Abu Dhabi government in India, the report denoted that (India Entertainment City Project) is one of the most important multi-faceted real estate development investment projects, which is built on an area of 400 acres (1.62 square kilometers). The project includes residential, commercial complexes, hotels and resorts, which is a complete city with all service, which   focused on entertainment. Abu Dhabi Investment House is the implementing entity   of this project, which started in 2010. The report added that the Space City which  (Marib Holding Company) intends  to build in Chika Babelor, Bangalore District, lies about 90 km from the city of Bangalore,  stands as an important project, which will inject investments of $ 4 billion Indian rupees. The project, which received preliminary approval from the State Government, aims to create a Disneyland-modeled park, including integrated, business and residential projects for entertainment along an area of 1600 acres.The report cited important information about the major sectors in the Indian economy, pointing out that India's most key exports include agricultural products, textiles, gems and jewelry, services and software technologies, chemical products and leather, while main India's imports include: petroleum and petroleum products, inorganic chemicals, iron and steel, fertilizers, and plastics. The major trading partners of India are the United States of America, Japan, China and United Arab Emirates. According to the report, India is greatly focuses on the technology sector, which contributes considerably to GDP, and to raising the standard of living. A number of ministries and departments foster and encourage technology, especially the Ministry of Science and Technology.India had developed in 2003 an integrated policy of technology and science, where a number of technology cities were established, especially the Bangalore Tech City. The importance these developments were aided by Microsoft and HP. Bangalore alone, hosts more than 300 companies and institutions working in the field of technology and computer software.The total trade between the two countries amounted to $ 44.5 billion last year, and reached about $30 billion during the first six months of 2011, according to press statements made by the Indian Minister of Corporate Affairs, Veerappa Molly and, during his visit to the State.These numbers are evidence of the strength of the relations between the two countries, and the confidence given by Indian companies and investors to the UAE.The minister pointed out that India was affected by the crisis of sovereign debt, which is growing in the United States and the European Union, but stressed the solidity of the Indian economy in the face of crisis, citing the growth achieved by India in 2008 during the global financial crisis, when many financial and banking institutions fell apart by the repercussions of the crisis. The Minister stressed the ability of the Indian economy in the face of any new economic turmoil in the world that may arise from time to time.The Indian Minister emphasized India's ability to resist crises, as the growth experienced by India,  is led by the huge domestic consumption, where the local economy plays a major role in economic growth in India,  which confirms the readiness of India to address  and stand  any adverse economic  developments. The forum activities will be launched by opening speeches of senior officials from both sides, followed by the first panel discussion entitled Abu Dhabi and India: the establishment of long-term partnership where Abu Dhabi and India’s potentials and opportunities to create business and economic partnerships that will benefit both sides will be reviewed, while focusing on the government of Abu Dhabi's future trends in line with its economic plan 2030 and what could be of main interest to major Indian companies to enable cross-border trading. The second panel discussion will be dedicated to discussing finance and banking issues in light of the UAE monetary policy which forms an ideal platform for foreign investors making it easier for Indian companies to play a key role in financing projects in the Emirate of Abu Dhabi. As for the third panel discussion of the forum, issues related to the industrial sector in the two countries will be discussed along with other issues, such as Abu Dhabi investment in infrastructure and energy resources and why this sector is targeted to be the economic diversification driver according to the determinants of Abu Dhabi economic vision 2030, making the emirate more attractive for industrial investments from all over the world. Whereas the fourth panel discussion will be dedicated to review infrastructure and development projects for the transportation sector in Abu Dhabi, where Indian companies can make successful investments which benefit from the opportunities and incentives offered by the government of Abu Dhabi. The fifth and final panel discussion of the Forum will deal with the energy sector and the requirements of both Abu Dhabi and India to take advantage of the expertise and partnerships related to this vital sector in light of Abu Dhabi's natural energy resources of oil and how to meet India’s needs of energy, which will present a pivotal question during the session about the role that the private sector can play in such partnerships.
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