The United Arab Emirates and India plan to create a $75 billion fund to invest in Indian infrastructure, according to a joint statement at the end of Prime Minister Narendra Modi’s visit on Monday.
The fund will support the expansion of India’s network of railways, ports, roads, airports and industrial corridors. The countries also aim to increase trade by 60 percent in the next five years.
The U.A.E. is already India’s third-largest trade partner and home to more than 2 million Indians. Earlier Monday, Modi, the first Indian premier to visit the U.A.E. in more than three decades, told investors in Abu Dhabi that his country needs $1 trillion in investments, touting opportunities in areas from real estate to energy and tourism.
“There was a lot of interest in railways, roads, in construction of different kinds” and energy during the trip, Indian Foreign Secretary S. Jaishankar told reporters.
Modi held talks with government officials and top executives from companies including Emirates Airline, DP World, Emaar Properties, Mubadala and Emirates Investment Authority. Retail king M.A. Yusuff Ali was among the prominent Indian business leaders who attended the event.
The premier said that India is seeking $1 trillion in investments globally, U.A.E. Economy Minister Sultan al-Mansoori told Bloomberg in Abu Dhabi. “The U.A.E. could be a partner in part of this future growth of India,” he said.
In his meeting with U.A.E. executives, Modi’s main message was that “they should look at India as long-term investors,” Vikas Swarup, spokesman for India’s external affairs ministry, told reporters.
India attracted $377 billion in foreign direct investment between April 2000 and May 2015, according to figures from its Department for Industrial Policy and Promotion.
Modi’s $1 trillion target, which Swarup confirmed, probably refers to “the infrastructure requirement for India,” Dharmakirti Joshi, chief economist for Crisil Ltd., said by phone from Mumbai.
For India to attract the entire amount through foreign investments, it would take “a huge amount of time,” he said. Foreign investment is still expected to increase over the next five years, Joshi said.
“There is an expectation that the business climate is going to improve and the government is trying to improve the ease of doing business,” he said.
U.A.E. investors have faced challenges in India related to regulations and the business environment, al-Mansoori said. Modi said he will send Commerce Minister Nirmala Sitharaman to the U.A.E. to coordinate with investors interested in India, according to al-Mansoori.
“Tourism has a great potential we need to explore more,” al-Mansoori, the economy minister, said, citing hotels and theme parks as possibilities.
Abu Dhabi will also allot land to build the first Hindu temple in the emirate, Modi said on Twitter.
Tens of thousands of people turned out for Modi’s final event before leaving U.A.E. at a cricket stadium, where speakers blared popular Bollywood music and dancers performed in a traditional Indian style. Modi spoke from a podium raised above the crowd, thanking the Crown Prince of Abu Dhabi and getting the crowd on its feet after asking them to give the prince a standing ovation.