The UAE’s offer to invest up to $75 billion in India, mainly in the infrastructure development sector, following Prime Minister Narendra Modi’s two-day visit, could be the largest solid investment offer India has received from any country so far.

The offer, along with a decision by both the sides to jack up trade by 60 per cent in five years, has turned Modi’s two-day visit to the UAE a grand success in terms of bilateral economic relationship, Indian businessmen in the UAE point out. The UAE is India’s third largest trading partner with last year’s trade rising close to $60 billion. When Prime Minister Indira Gandhi visited Abdu Dhabi in 1981, the bilateral trade was less than $200 million. The UAE, currently the world’s fastest growing economy, is flush with funds and is scouting for safe investments. NRI businessmen feel that if the Indian government, which had until recently failed to acknowledge the UAE’s economic significance, makes use of the investment and trade offers, it could greatly add to India’s infrastructure.

KV Shamsudheen, a Dubai-based businessman and financial consultant, who has lived in the UAE for 45 years, told BusinessLine that the Arabs, particularly the Emiratis, always had a soft corner for India. “They love to do business with India,” he said. He said the UAE had more than $2 trillion of sovereign funds and that most of the $75-billion investments offered would come from these funds. If India offers decent investment opportunities, a sizeable chunk of the sovereign funds could flow here. Many large investors were interested in hospitality and tourism sectors in India, he pointed out.

Commenting on the push Modi’s visit has given to economic ties, UAE’s Economy Minister Sultan Saeed Al Mansoori said that his country was looking to invest in infrastructure development, real estate, railways and tourism in India. At a meeting of investors held in Dubai after meeting Modi, he invited UAE’s businessmen to invest in India. Modi had mentioned in his Dubai address that India was ripe for a trillion-dollar investment. Modi met several NRI business leaders such as MA Yusuffali, BR Shetty and Azad Moopen who were all willing to make more investments back home.

The presence of more than 26 lakh Indian expats in the UAE, making up nearly a third of the country’s population, and the large community of Indian businessmen, are two important factors that will accelerate the proposed investments.

The joint statement issued by the two governments at the end of Modi’s visit promises to take steps to “encourage the investment institutions of the 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 $75 billion”.     

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