UAE’s promised $2-billion investments in food parks yet to materialise 

The UAE, which promised $2-billion investments in food parks in India, at the four nation I2U2 (India-Israel-UAE-USA) Summit held virtually in July 2022, is yet to deliver on its commitment more than a year later as it continues to raise policy concerns, sources have said.

“There have been several meetings between the two sides to sort out concerns, such as those related to the Essential Commodities Act. But UAE representatives, including top officials from investment body ADQ, just go round and round in circles with their queries and haven’t given any indications of when they would make the investments. They need to show more urgency,” a source tracking the matter told businessline.

At the I2U2 Summit last year, virtually attended by Prime Minister Narendra Modi, US President Joe Biden, Israeli Prime Minister (former) Yair Lapid and UAE President Sheikh Mohamed bin Zayed Al Nahyan, the UAE announced that it will invest $2 billion to develop a series of integrated food parks across India as part of an initiative to enhance food security in the Middle East and South Asia.

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“(These food parks).. would incorporate state-of-the-art climate-smart technologies to reduce food waste and spoilage, conserve fresh water, and employ renewable energy sources,” per the joint statement issued after the summit by the leaders. This was in line with the focus of the meeting on food security crisis and clean energy.  

Five crops

Gujarat and Madhya Pradesh were named as the States initially exploring setting up these parks while the five crops that are to be in focus include potatoes, rice, onions, spices and bananas.

However, the UAE has been raising concerns about India’s Essential Commodities Act as three of the identified crops–onions, rice, bananas–are covered under the Act. As export curbs can be imposed on such items if there are fears of a domestic shortage, the UAE’s concerns are that the uncertainty could hurt the prospects of the food parks, the source said.

“India has already communicated that it is ready to work around the problem stemming from the ECA. A minimum amount of exports of the identified commodities, say onions, can be assured without curbs, not raw but in some kind of processed form such as cut and packaged. Once the UAE indicates the quantities, things could move on,” the source said.

The UAE would have been happier getting land for the food park, but States can’t give land and this has been clarified. “For cultivation, the investors can get into contract farming with farmers and this should serve their purpose,” the source added. Queries were also raised by the UAE on India’s taxation policies related to food parks which have been answered, he said.

The fact that the UAE’s proposal to invest in food parks in India dates back to around 2018 which got later dovetailed into the I2U2 commitment has made the delay more worrisome for India. “It was a conscious decision taken at the I2U2 Summit last year that the investments would be made in the food parks by the UAE to help maximise crop yields and, in turn, help tackle food insecurity in South Asia and the Middle East. Hopefully, in the coming days remaining issues will get sorted out and investments will begin,” the source said.

The UAE was India’s third largest trading partner in 2022-23 with bilateral trade valued at $76.16 billion. After the signing of the India-UAE Comprehensive Economic Partnership Agreement last year, the two sides have now set a target of increasing bilateral trade in non-petroleum products to $100 billion by 2030 from $48 billion at present.

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