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"One dimension I would like to underline and play up is the cooperation in terms of defence production. India, under Prime Minister Narendra Modi's leadership, is laying a lot of importance on 'Make in India'. This, together with the fact that India is one of the largest military and equipment buyers, we are looking at a growing need for purchasing a lot of equipment that is technically superior," the minister told a delegation of UAE journalists at her office.
India is increasingly looking at modernising its defence equipment and increasing its stealth capability. "We are looking at an across the board approach towards procurement, and where possible if it can be manufactured in India. It is beneficial in two ways: it builds a captive market, and manufacturers can sell in India and to markets outside, too."
Sitharaman declined to comment on the investments the UAE would be making in the defence sector in India this year, saying it is a commercial decision.
"The decision rests with the investors when they would like to invest. Although I can see very clearly intentions of wanting to do it... and we have very clearly said any amount of hand holding that is required will be done by specific groups from within the industry."
All the three forces of India - army, navy and air force - are modernising their equipment and the thrust is to get going with the acquisitions of modern apparatus that has been pending for over 10 years. "We have already lost a considerable about of time. But under PM Modi we have made sure that acquisition is on track... DRDO too has rapidly moved forward to integration between what DRDO has achieved with the forces."
Sitharaman recalled visiting the UAE during her stint as india's commerce minister. "The depth of the relationship has become notice worthy after the Indian prime minister visited and we are grateful to His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and his brothers to have offered a wonderful welcome to our PM. And I can see that the relationship is only growing from strength to strength," the minister added.
Push for FDI from UAE, GCC
Meanwhile,Annual foreign direct investment (FDI) from the GCC to India stood at $1.4 billion in 2016, according to the Unctad, and a large chunk of these investments were from the UAE at more than $1 billion.
However, efforts are now to shore up these numbers and bring the private sector into the fold.
"We are now looking at increasing the expanse of investments and bring in private sector into the fold. We want to have a forward looking pathway. The top leadership in the UAE is impressed that we are no longer talking just about projects but have a vision for India. They have said that they are willing to invest in the vision, and would also like to facilitate investments through interactions with other foreign sovereign wealth funds," said Suresh Prabhu, India's minister of commerce and industry.
India has also proposed a free trade agreement with the UAE and is awaiting a response on that. "The UAE imports quite a lot in terms of food and agriculture items. We can ensure food security of the UAE through such agreements," said Prabhu.
In terms of FDI, India ranks high in terms of outbound investment into the UAE.
"We are into all spheres of activities: trading, services, steel manufacturing companies. But there are no big ticket investments so far. We are now looking at shoring such investments and have been talking at high level for it to realise."
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