India and the United Arab Emirates have recently embarked on an ambitious drive to upgrade their bilateral relations. But gains in its strategic and economic importance are likely to come at Pakistan’s expense, explain Emile Hokayem and Rahul Roy-Chaudhury. And India’s desire to avoid becoming entangled in the Middle East’s complex and bruising politics will act as a brake on the relationship.

Nahendra Modi visits the UAE. Credit: www.flickr.com/photos/narendramodiofficialBy Emile Hokayem, Senior Fellow for Middle East Security, and Rahul Roy-Chaudhury, Senior Fellow for South Asia

India’s invitation to the Crown Prince of Abu Dhabi to be its ‘chief guest’ at its Republic Day parade on 26 January is an important indication of just how significant its growing relationship with the United Arab Emirates has become.

Sheikh Mohammad bin Zayed al-Nahyan will be India’s first chief guest in over 50 years who is not a head of state or government (though he is the UAE's president-in-waiting). He will also be the first chief guest from a Gulf Cooperation Council member state since Saudi Arabia's King Abdullah bin Abdulaziz al-Saud in 2006. The UAE was the first GCC country Narendra Modi visited in August 2015, marking the first visit by an Indian prime minister for 34 years.  

While dense and diverse, India–UAE relations have long suffered from a lack of institutionalisation. These bilateral visits aim to significantly upgrade a relationship that is gaining in strategic and economic importance. A India–UAE strategic dialogue between the two foreign ministries, the first of which took place on 20 January 2017, is expected to ensure momentum and coherence.

Indeed, the focus of Sheikh Mohammad’s second visit to India in less than a year will be on signing a unique comprehensive strategic partnership agreement. It aims to increase bilateral trade by 60% over the next five years and marks the beginning of a US$75 billion investment into India’s infrastructure, spanning ports, airports, highways and construction, as well as petrochemical projects. While bilateral relations were previously centred on ‘energy, economy and expatriates’, they will have a new emphasis on ‘security, investments and defence’. These initiatives will have implications for regional security and are likely to come at Pakistan’s expense.

Bilateral trade amounted to US$58bn in 2016, making India the UAE’s largest trading partner, while the UAE is India’s third-largest trading partner after China and the United States. For India, the UAE is its fifth-largest supplier of crude oil and plays host to its largest expatriate population after Saudi Arabia. Around 2.6 million Indian nationals form the UAE’s largest expatriate group.

India has begun to embrace bilateral defence and naval cooperation, including joint exercises, training and ship visits. One of its leading businessmen, Anil Ambani, recently signed a memorandum of understanding with Emirates Defence Industries Company, a state-owned defence giant, to jointly explore capabilities in the manufacture of naval and commercial ships, defence electronics and armament manufacturing.

Pakistan loses out

Although the UAE has traditionally been a strong supporter of Pakistan, the new comprehensive strategic partnership agreement with India confirms a significant policy change in India’s favour. Abu Dhabi and Dubai have had privileged relations with the Bhutto–Zardari political faction, but cooler ones with the current conservative Prime Minister Nawaz Sharif, who is seen as overly accommodating to Islamist movements. The UAE’s concerns about rising extremism in the region and its tough approach to political Islamism converge with India’s own security priorities.

The killing of five UAE diplomats in a bomb attack in Kandahar in southern Afghanistan on 10 January 2017, along with the wounding of the UAE ambassador to Afghanistan, Juma Mohammed Abdullah al-Kaabi, may well have exacerbated such tensions. The attack was reportedly mounted by the Haqqani Network, which is supported by elements of Pakistan’s security establishment.

The UAE was also disappointed by Pakistan’s decision in April 2015 not to join the Saudi-led military intervention, with active Emirati participation, against the Houthis in Yemen. This suggested to Gulf elites that the decades-long Gulf investment in Pakistan would not translate into expected security assistance, and that attention and resources needed to be re-allocated accordingly.

The UAE and India have already begun a joint effort to counter extremism. The UAE has quietly deported Indian nationals wanted by the authorities at home on allegations of terrorism, including individuals belonging to the Indian Mujahideen. A day after the September 2016 terror attack on an Indian army brigade headquarters in Uri, Jammu and Kashmir, the UAE publicly suggested that New Delhi should take decisive action against the perpetrators. The UAE also voiced its support for India within hours of the Pathankot terror attack in January 2016. Both these attacks were carried out by Pakistan-based militant groups with links to elements of their country’s security establishment.

Cooperation, not entanglement

Judging by official statements, the UAE–Indian strategic agenda is ambitious. They are seeking to: expand cooperation on counter-terrorism and counter-extremism; share intelligence and ensure greater cooperation among their intelligence and security agencies; thwart the financing of terrorism and radicalisation; and enhance defence and maritime security cooperation.

While both leaderships will strive to be responsive and have identified issues of immediate collaboration, they still face significant constraints. But regardless of how persistent the UAE is in its courtship of New Delhi, India’s concern about becoming entangled in the Middle East’s complex and bruising politics will act as a brake on the relationship. Although India has publicly stated its interest in the Gulf region’s sea lines of communication remaining open and flowing, it has no ambition to become a US-style protector of Gulf security. This would run counter to its longstanding policy of avoiding alliances or military groups, and refraining from foreign military deployments not mandated by the United Nations. More broadly, India is loath to risk damaging its core interests in the region by seeking a conspicuously active or ambitious role. In particular, India does not want to take sides in the rivalry between Iran and the Gulf states.

The safety and security of its largest expatriate community is a key driver of India’s Gulf policy. Any military involvement in the region could result in blowback for Indian nationals by making them targets for terrorist attacks or political retaliation by Gulf states displeased with Indian policy or action. High-profile Indian involvement in Middle East politics could also intensify sectarian divisions within India’s Muslim population.

This is why India will formulate specific demands rather than dangle the prospect of strategic alignment. One of its primary objectives will be to seek to freeze multi-million-dollar properties and assets held in the UAE by Dawood Ibrahim, a prime suspect in the 1993 Mumbai terror attacks. Suggestions in the press over the past few weeks that the UAE government had begun to take action on this front have been officially denied by both sides.

And while close counter-terrorism cooperation is expected to take place in both countries against active as well as ‘sleeper’ cells thought to be linked to the Islamic State militant group, also known as ISIS or ISIL, India is not expected to participate or involve itself militarily in the international military coalition against ISIS, of which the UAE is a leading Arab member.

The UAE too faces constraints. However disappointed with Islamabad UAE leaders might be, Pakistan remains a privileged interlocutor of the Gulf states and especially Saudi Arabia. The strengthening of ties with India signals displeasure, but certainly does not amount to a breakdown.

Instead, keenly aware of India’s growing geopolitical importance, the UAE is seeking to diversify its relationships as world leaders begin to question America’s dominance. New Delhi is an obvious partner for Abu Dhabi, and the good personal connection between Indian prime minister Modi and Mohammad bin Zayed can drive the relationship in the short term while their governments work to institutionalise their dealings. Nevertheless, navigating the complex Indian political and business landscape will require great attention and effort.

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