Interview: Pinarayi Vijayan
As bilateral trade continues to grow, what are the key focus areas for future investment?
PINARAYI VIJAYAN: India’s commercial ties with the Arab world began with Kerala, and India has enjoyed commercial and cultural exchanges with the UAE for several centuries. Around 25% of the 2.5m Indian nationals currently living and working in the UAE are from Kerala.
The UAE is India’s third-largest trading partner, with current annual trade volumes valued at around $53bn and this is expected to increase to around $100bn by 2020, according to the Confederation of Indian Industry. Bilateral relations between the UAE and India are being strengthened through exchanges and investments in sectors such as education, health care, tourism and IT.
In addition, the UAE is the 10th-largest foreign direct investment (FDI) source market for India, with cumulative FDI reaching $4.8bn between April 2000 and March 2017. Recent investments from the UAE include a $459m investment in a leisure complex in India, as well as a $2bn investment by the Abu Dhabi Investment Authority and NRI-Emirati Investors Group into India’s National Infrastructure Investment Fund (NIIF). NIIF is targeting joint investments of $75bn to support new infrastructure projects including roads, railways, airports and industrial corridors.
Kerala’s government is also focused on developing infrastructure networks, such as the Vizhinjam International Seaport and SmartCity Kochi. The bilateral currency swap agreement signed in February 2018 will encourage trade by expediting transactions and reducing conversion costs.
How can Indian companies promote further economic diversification in the UAE?
VIJAYAN: Indian businesses have played a major role in the economic growth of the UAE, and as a result, a number of prominent Keralite business leaders are embedded in the local economy. Due to this large community, Indians constitute a significant proportion of inward-bound tourist numbers, with arrivals from India having increased by 20% in 2017. Kerala is also known for its tourist attractions. Its tourism sector represented more than 12% of the state’s GDP and annual foreign tourist arrivals reached 10m in 2017. Continued growth in bilateral tourism moving forward will also serve to strengthen cultural exchanges and understanding between the two countries.
India has an abundance of skilled talent, particularly in IT and health care. This has led UAE-based companies to be active investors in Kerala’s health care, infrastructure and IT sectors. SmartCity Kochi, for example, is one of the largest upcoming IT special economic zones in the country and is a joint venture between the government of Kerala and Dubai Holding. As the UAE continues to promote investment in these sectors, while also positioning itself as a hub for research and development, both countries can promote the further diversification of the economy.
What plans are under way to strengthen existing trade and cultural ties between Kerala and Sharjah?
VIJAYAN: Sharjah has supported Kerala by assisting in infrastructure development projects and specialised missions regarding natural resource depletion, education and health care services.
All of these have been discussed during bilateral visits, including the recent visit by Sheikh Sultan bin Mohammed Al Qasimi. Our government is also planning a number of projects to benefit Keralites residing in the UAE. These include the establishment of the Kerala Cultural Centre in Sharjah to promote cultural exchange, and the launch of Sharjah Family City to provide affordable accommodation for Keralites.
Another potential project is an educational complex to provide secondary and professional education – with a public school as well as engineering and medical colleges – to allow non-resident Indian students to pursue or continue their higher education while living abroad.
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