UAE making India its top trading partner

Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum wants to make India, UAE's top trading partner.

Sheikh Mohammed, whose recent visit to India was aimed at energising ties between the two countries, said that he would pen a poem about his trip to India and that he was impressed by what he had seen here.

Q. Your government has started a new classification process for business and industry that the Indian workforce is finding troublesome. Companies are being encouraged to limit foreign national employees to 30 per cent. The Indian government has also raised objections to this.

Why did the government bring in a cap on hiring? In seeking closer ties with India, are you considering an exemption for the Indian workforce from this hiring cap?

A The labour policy simply classifies companies depending on the extent of diversity in their workforce. Companies that have more than 30% of their workforce from one nationality are required to pay higher fees for employment licenses.

But the fee increase is not substantial, it ranges depending on the company's classification to reach a maximum of 20% (or 1,000 AED per laborer). The classification system is has not impacted the growth of India's expatriate population in the UAE or the Indian worforce's ability to find jobs in the UAE.

The classification system is meant to encourage diversity rather than restrict employment. The diversity of UAE's society and workforce is a major economic driver that we intend to maintain and encourage. Additionally, the development of UAE citizens is a national priority that has to be reflected in the labor force

Q. India is hungry for energy and is looking for increased cooperation in the hydrocarbon sector with the UAE, particularly oil exploration with Abu Dhabi. What kind of cooperation does Your Highness envisage with India in this sector?

A. ADNOC would like to develop its gas reserves, and is also planning for a gas refinery. Indian companies have several opportunities to participate in this process. UAE is also working to increase oil production from 2.5mbd to 3.5mbd by 2012, this will create further opportunities for oil cooperation between the two nations. UAE is one of India top crude oil suppliers, and this relationship will continue to be strengthened in the coming years

Q. Indian companies are entering Dubai and the Northern emirates in larger numbers and the UAE is also looking for investments from India. What are the areas' companies can look at and is your government planning to give any concessions to Indian companies to encourage their entry into the UAE?

Meanwhile, are UAE companies interested in investing in mega projects in seaports, the IT and the infrastructure sectors in India?

A (I) Indian Companies in the UAE Indian companies top the number of foreign-owned businesses operating in the UAE and this trend continues on rising. They have built strong competitive positions in a number of sectors.

We will encourage more Indian companies to contribute to UAE's knowledge economic sectors such as technology, media and education, additionally Indian companies can play a major role in research and innovation in the UAE.

A highly encouraging investment environment exists for these companies through the multiple incentives offered in the special economic zones, the strong and historic ties between Indian and UAE businessmen and leaders and the large and influential Indian community.

(II) UAE Companies in India UAE companies have developed substantial experience and a strong reputation in developing and managing ports, economic zones, real-estate and infrastructure developments. These companies have also built expertise in managing the regulatory frameworks and in marketing and funding the mega projects.

India is undertaking major developments across the country, including about 170 economic zones, several ports, and infrastructure and urban developments in growing cities. UAE companies can provide tremendous support to their Indian counterparts in these projects, along all stages from financing to development to set-up and management.

UAE companies have already begun investing heavily in India, such as Emaar who is developing real-estate projects worth US$ 4 Billion in India.

Q. There have been concerns about the working conditions for unskilled labour in UAE companies. Is the government planning to take any extra steps to ensure implementation of labour laws by companies hiring unskilled labour in UAE?

A UAE is taking major steps to improve working conditions for laborers starting with the decree of HH Sheikh Khalifa (against human trafficking) and revisions to the existing labor law that will cover multiple topics including working hours, housing accommodation and living standards, and work safety and practices standards. A memorandum of understanding signed between the governments of India and the UAE in December has already resulted in a significant reduction in labor complaints, according to the Indian consulate in Dubai.

Specific steps to ensure compliance with these laws and to improve implementation include:

Substantial increase in the number of inspectors and compliance officers.

Active and decisive pursuit of violating companies.

A dedicated Dubai court will be set up to deal with labor cases Dedicated hotline that laborers can call to report employer abuses and law violation.

Labor Ministry's requirement for health insurance for laborers and implementation of a systematic mechanism for the collection of unpaid wages.

Central agency for supplying workers, bypassing the role of recruiting agents who often add to the woes of laborers.

New residential developments for laborers are being built that comply with stringent health, safety and living standards

Q. Dubai is the shopping city of the world and the home of retail tourism. But retail is also being pursued aggressively by other countries. How does Dubai plan to stave off the competition and are their plans to push Dubai brands in other countries?

A The trading and retail sector is of great significance to Dubai's economy and accounts for about 16% of its economic activity. In fact, licenses for the trading sector constitute about 72% of the total number of licenses issued by the DED every year.

The retail sector is expected to continue its high growth, strengthened by upcoming developments such as the Dubai Mall, the largest in the world

In Dubai, innovation is key, not only to grow the retail sector, but also to provide an unbeatable experience. Shoppers will continue to receive groundbreaking retail developments, supporting leisure activities and highest levels of customer service. The number of visitors to Dubai's Shopping Festival has been increasing by more than 8% annually in the past 10 years.

The retail sector is strongly driven by the tourism sector, which in itself is one of the focus areas of Dubai's strategic plan Dubai has built several successful brands that are growing outside the UAE. A number of these support the tourism and retail sectors such as Emirates Airlines and Jumeirah International.

Dubai's strategic plan stresses on the importance of these Dubai brands and sets forth a plan for strengthening them and supporting their regional and international expansion

Q. What measures can India and UAE take to strengthen institutional links between law enforcement agencies and financial and regulatory authorities and institutions?

A Dialogue between UAE and Indian institutions is necessary to establish links in several areas like money laundering, international crime, security threats, and trade safety and regulation. The UAE's central bank, customs, and security apparatus constantly work with all countries including India to ensure cooperation on all these matters.

Both countries have sent delegations periodically to strengthen ties, exchange ideas and technologies, and learn from best practices. Knowledge sharing can be further improved through conferences, trainings, and other benchmarking visits.

UAE institutions can engage with their Indian counterparts in MOUs for specific cooperation arrangements and for knowledge and technology exchange.

Q. What are some of the issues that UAE plans to be raise in the proposed Trade Policy Forum?

A Technology, knowledge, financial and human capital exchange; Resolve pending issues on rules of origin and differential tariff rates; Steps towards a Free-Trade-Agreement between the two countries

Q. The UAE has an anti-money laundering law and has also taken measures to check the flow of suspect money. There are apprehensions that the systems in place are inadequate to check the flow of such finances. Is the government planning to take any further corrective steps to check money-laundering and the movement of terror funds?

A The anti-money-laundering law in the UAE is stringent, it imposes strict restrictions on money transfers and has set severe penalties for violators of the law. It has made the maximum penalty for money-laundering seven years in jail and a 10 million dirham ($2.7M) fine.

Over the past few years the UAE government has taken substantial action against violators, including applying bank freezes on the accounts of many individuals and businesses suspected of involvement in money-laundering.

Additionally, the economic free zones are taking action against money-laundering, such as the Dubai Multi-Commodities Center (DMCC) which will apply transparency standards on the gems and other precious metals businesses, and it will educate its staff on money-laundering, fraud identification, verification measures, etc.