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India-UAE MoU to Mobilise Long term Investment
Mar 30, 2016

Into the National Investment and Infrastructure Fund

Government of India has given its ex-post facto approval for a Memorandum of Understanding (MoU) between India and the United Arab Emirates (UAE) to mobilise long term investment into the National Investment and Infrastructure Fund (NIIF).

  • The objective of NIIF is to maximize economic impact mainly through infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects, NIIF would solicit equity participation from strategic anchor partners.
     
  • The MoU will help establish a transparent and high-level framework and collaboration platform under which both countries intend to explore ways to facilitate and expand the participation of UAE's investment institutions in appropriate infrastructure projects and institutions in India including NIIF, in a manner consistent with the established investment criteria and standards in a mutually agreed manner.
     
  • A joint working group comprising of the concerned representatives of both parties would take forward cooperation under this MOU and to discuss and agree the terms, principles and criteria jointly.

Background: The Government of India approved the creation of the National Investment and Infrastructure Fund (NIIF) in July, 2015. The NIIF has already been established as a Category II Alternate Investment Funds (AIF) as per the regulations of the Securities and Exchange Board of India (SEBI).

The Joint Statement with UAE (India-UAE) during the visit of Prime Minister of India to UAE on 16-17 August 2015, mentions the establishment of UAE-India Infrastructure Investment Fund, with the aim of reaching a target of USD 75 billion to support investment in India's plans for rapid expansion of next generation infrastructure, especially in railways, ports, roads, airports and industrial corridors and parks.

Indian Diaspora in UAE

  • UAE is home to 2.6 million Indian expats, the largest expat community here constituting 30 percent of the total population.
     
  • According to the World Bank, India being the top receiver of remittances from its worldwide diaspora at $70.4 billion in 2014, Indians living and working in the UAE are the biggest source of remittances to India, contributing $12.6 billion.
     
  • In comparison, about $11.2 billion of remittances for India originated in the US, which has a larger Indian origin population, of over three million, with much higher incomes.
     
  • The contribution of Indians to the UAE growth story too has been immense, whether it is the hard work and toil of the thousands of unskilled labourers in building its innumerable skyscrapers, those working in the service sector or the contribution of Indian businessmen and professionals in fields like health, retail, education or real estate.

India primarily seeks to enhance cooperation in energy and trade and reach out to investors there with India-UAE trade valued at around $60 billion. This makes UAE India’s third largest trading partner for the year 2013-14 after giants China and US, while India is the UAE’s second largest trading partner.


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