India to begin first ever UAE naval exercises off Abu Dhabi shores

India will begin its first-ever naval exercises off the shores on Abu Dhabi next month, as the UAE and Indian prepare for a number of agreements to collaborate on defence, security, energy, space and in the coming years.

Ahead of the second visit by India's prime minister Narendra Modi to the UAE on Saturday, efforts are being made to translate between 12 and 14 agreements between both countries into real action.
"It shows recognition that we have a shared interest in maritime security against piracy, in keeping the sea lanes open, in ensuring the freedom of navigation and perhaps also the recognition of what our forefathers knew: that our countries are neighbours separated only by water," said Navdeep Suri, Indian ambassador to the UAE.

"So we're trying today to revive that historical connection between our countries. The kind of conversations we are having in defence or security today would perhaps have been unimaginable a few years back and there's a level of confidence in our leadership to say how we can learn from each other in countering violent extremism and radicalisation."
India is home to 180 million Muslims. "[Some may ask] how can India make such a feeble contribution to Daesh, they have produced so few terrorists and how have the Muslim communities remained so integrated within the context of the pluralistic society that we have," the ambassador said at the Emirates Diplomatic Academy on Wednesday.

“Similarly, here in the UAE with Hedayah and the Sawab Centre (anti-terrorism centres), there are things for us to try and emulate and for those conversations to happen, you need really strong and stable platforms.”

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In energy, the UAE agreed to establish a strategic petroleum reserve in India. "[India] is an energy-deficit country," Mr Suri said. "We used to import 55 per cent of our energy, but today we have reached 79 per cent. So we have to transform from being a major buyer of oil from the UAE into something much more multidimensional."
Space is another area of joint collaboration, with the former chairman of the Indian Space Research Organisation set to join the advisory board of the UAE Space Agency. Mr Suri said: "When you look at India's space programme with more than 200 satellites and the launch capacities we have been able to develop, it's a partnership waiting to happen. The UAE has huge ambitions in this area, we have 50 years of experience. We have demonstrated the capacity to deliver some of the lowest-cost solutions in the space area and [we could] potentially train UAE space personnel."
More investment will also go into India from the UAE in terms of infrastructure projects following the joint fund set up in 2016 with US$75 million planned to go towards India's roads, airports, ports, railways and parks.

"Twenty-nine per cent of companies in Jebel Ali are Indian and there are high percentages in other free zones, but the missing link has been investment from the UAE in India," he said. "People expected [the investment] to happen immediately, but we've had to clarify that it is investment, not aid, a loan nor a grant, and it needs financially viable projects."
The embassy has been working with the Abu Dhabi Investment Authority, DP World, Emaar and Mubadala to understand their areas of interest and what they view as opportunities and problems in India. The ambassador said he expects this trend will strengthen "very significantly" in the next year or two.
During his less than 20-hour visit to the UAE, Prime Minister Modi plans to take part in the launch of a Hindu temple in Abu Dhabi. "A very large tract of land was donated to the Indian community by Sheikh Mohammed bin Zayed," he said. "I am confident that once this temple is up, it will truly be a beacon, not only of Indian culture here but the UAE's own spirit of tolerance that celebrates diversity and enables all communities the space to practice their religion, culture, identity and language."

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

India to begin first ever UAE naval exercises off Abu Dhabi shores

Ahead of the second visit by India’s prime minister Narendra Modi to the UAE on Saturday, efforts are being made to put into action between 12 and 14 agreements between both countries