India strengthens bonds with Muslim World, expanding partnerships and cooperation

New Delhi: Just a year ago, analysts predicted a deterioration in the relationship between India and the Muslim world, especially after a couple of derogatory remarks were made by spokespersons of the ruling Bharatiya Janata Party (BJP) against Prophet Mohammad and Islam. However, the situation has taken a positive turn. India's ties with the Muslim world are thriving and, for the first time in the country's independent history, are fostering robust and strategic relations. The recent visit of Indian Prime Minister Narendra Modi to Egypt and UAE and a successful India-Arab League partnership meeting in New Delhi early this month further strengthen the bonds.

India has been making strides in building stronger relationships with Muslim-majority countries. June and July witnessed the United Arab Emirates (UAE) and the Arab League engaging in relationship-building efforts, marked by the signing of several mutual contracts and MoUs.

India is committed to enhancing their Comprehensive Strategic Partnership, exploring new areas of collaboration, and fostering peace, stability, and prosperity within the region and beyond.

The recent visit of Indian Prime Minister Narendra Modi to the UAE in July 2023 further solidified the growing bond between India and the Muslim world. This marked Modi's fifth visit to the UAE in the past eight years, highlighting the significance of the bilateral relationship. The visit showcased tremendous progress in various areas, underscoring the importance of the India-UAE relationship. In 2017, the relationship was elevated to a Comprehensive Strategic Partnership, and this visit reaffirmed the commitment to that partnership.

Use of Local Currency

One of the notable achievements during the visit was the signing of a Memorandum of Understanding (MoU) between the Central Banks of India and the UAE, establishing a framework for promoting the use of local currencies (INR-AED) in cross-border transactions. This MoU emphasizes the confidence and robustness of the economies of both nations, fostering stronger economic engagement. Additionally, the leaders expressed interest in enhancing cooperation in payment systems, including integrating instant payment systems and the mutual acceptance of domestic card schemes.

IIT Delhi in Abu Dhabi

Another significant accomplishment was the establishment of the Indian Institute of Technology – Delhi in Abu Dhabi. This move strengthens educational ties between the two countries, with plans for the institute to offer various programs, including a Master's program in Energy Transition and Sustainability. Furthermore, sustainable energy, climate studies, computing, and data sciences research centres will be established.

UAE is India's third-largest trading partner

The economic aspect of the relationship is also flourishing. The UAE has become India's third-largest trading partner, with bilateral trade reaching USD 85 billion in 2022. The signing of the Comprehensive Economic Partnership Agreement (CEPA) in 2022 further boosted business, resulting in a 15% increase since its implementation. The leaders discussed enhancing cooperation in the energy sector, including oil, gas, and renewable energy, and investments in India's Strategic Petroleum Reserve Program.

The Indian expatriate community is the largest ethnic community in the UAE, constituting roughly 25 per cent of the country's population. The number of resident Indian Nationals is estimated to be 3.5 million in 2021, as per UAE records. Approx. 20% of the diaspora is in the Emirate of Abu Dhabi, and the rest is in six Northern Emirates, including Dubai. However, most of the Indians living here are employed.

Modi's Visit to Egypt

India's engagement with the Muslim world extends beyond the UAE. Prime Minister Modi's visit to Egypt in June 2023 was crucial in strengthening bilateral relations between the two countries.

The visit, reciprocating President Abdel Fattah el-Sisi's attendance as the chief guest at India's Republic Day celebrations earlier in the year, focused on increasing India's investment in Egypt and exploring avenues for Egypt's entry into the BRICS economic bloc. It also aims to balance China, which wants to bring Pakistan to BRICS. Prime Minister was visiting Egypt for the first time and the first by any Indian prime minister since 1997.

In January 2023, Egyptian President Abdel Fattah el-Sisi was the chief guest at India's 74th Republic Day celebrations. El-Sisi was the first Egyptian president accorded the honour.

For India, it is also to consolidate its position as a voice of the Global South as it gears up to host the G20 meeting in September in New Delhi. The signing of various trade agreements also took place between the two countries. India and Egypt have enjoyed close ties as they were the founding numbers of the Non-Alignment Movement (NAM) in 1961, a global forum of 120 developing countries that believed in the non-alignment of major power blocs. New Delhi continuously seeks deeper access to the Middle East and North Africa region through Cairo.

6th India-Arab Partnership Conference

India's efforts to foster closer ties with Arab countries were evident in the 6th India-Arab Partnership Conference in New Delhi early this month. The conference, organized under the Arab-India Cooperation Forum, aimed to explore new horizons in investment, trade, and services. Participants from Arab states and India discussed potential trade and investment opportunities and focused on critical issues such as sustainable development, resilient supply chains, and economic decentralization. This conference served as a platform for strengthening economic cooperation and reinforcing India's role as a global player.

The Gulf countries play a vital role in India's economic landscape, with significant contributions in imports, fuel supplies, remittance inflows, and a large Indian diaspora. Strengthening ties with these nations is crucial for India's economic growth and regional stability.

India's growing engagement with the Muslim world reflects its commitment to fostering cooperation, peace, and stability. The deepening partnerships in various sectors, such as trade, education, energy, and combating extremism, demonstrate India's proactive approach to building strong relationships with Muslim-majority nations.

These efforts hold immense potential for India's economic growth, regional influence, and global standing as it positions itself as a voice for the Global South.

In conclusion, India's strengthening of ties with the Muslim world marks a significant shift in its foreign policy approach. Despite initial concerns about deteriorating relations, India has successfully fostered robust and strategic relationships with Muslim-majority countries.

India's engagement with Egypt and hosting the 6th India-Arab Partnership Conference underscores its commitment to expanding partnerships and cooperation in the Arab world. These initiatives have enhanced economic ties and addressed critical global issues such as climate change, terrorism, and extremism.

The Gulf countries play a vital role in several key areas. The region accounts for 16% of India’s total imports, with the UAE and Saudi Arabia among India’s top five import partners. Secondly, India sources close to 40% of its fuel needs from the GCC countries and Iran. About nine million or ninety lakh Indians (28% of overseas Indians) reside in the Gulf region. And lastly, the Indian diaspora account for over 55% of India’s remittance inflows.

As India continues to build upon these relationships and explore new avenues of collaboration, the future holds promising opportunities for deeper cooperation, increased trade, and mutual prosperity between India and the Muslim world.