‘India, UAE to connect grid’

He noted that with the interconnection of power supplies, the six countries of the GCC bloc will all be connected to India, promoting interdependence. Sudhir also said that after the signing of the free trade agreement between India and the UAE, bilateral trade increased by nearly 30% between April and November, and that buyer-seller meetings are being organized for industries such as engineering, food, gold jewellery, electronics, etc. to encourage growth in non-oil trade. . Edited excerpt:

Eight months after the Comprehensive Economic Partnership Agreement (CEPA) was signed, how do you assess its impact on bilateral trade between India and the UAE?

As far as bilateral trade is concerned, we have been doing very well. Therefore, even before CEPA, the UAE is our third largest trading partner and second largest export destination. We’re their second largest trading partner, and we’re already number one.

What happened after CEPA was that this trade got a further boost. CEPA came into force on May 1. After the benefit kicks in, it also takes a month or two for the business community on both sides to start taking advantage of it. This takes a little while. So over the past six to eight months, several industries have really gotten a boost. Our bilateral trade has grown by almost 30%. As awareness grows and people become more accustomed to certificates of origin and other small paperwork associated with using benefits under CEPA, trade will further increase. Exports to the UAE have grown by almost 19% over the past eight months. These are very impressive numbers.

Data for the April-November period showed the trade deficit also widened to $16.1 billion from $10.3 billion a year earlier. Even the non-oil trade deficit appears to have widened slightly. Is this relevant?

I will explore why. The widening of the trade deficit was mainly due to rising oil prices. Last year, prices were much lower. But after the Ukraine war, prices skyrocketed and one of our main imports was oil. That’s why. However, we can see that the crude LPG that we import from the UAE, we re-export half of the finished products to the UAE.

The one-way flow of oil and gas trade is counterintuitive. I think our imports are about $10 billion, but our exports are $5 billion.

Our non-oil exports are not growing as fast as overall trade. Non-oil exports rose around 5% in the April-November period, while imports rose 10%. What is the way forward?

On the non-oil side, engineering exports rose, gold rose and pharmaceuticals also showed high double-digit growth. So, things happen gradually. We hold many buyer-seller meetings in key industries. We started with gold jewellery, then moved to engineered products, electronics and now we will focus on food. Over the next six to seven months, we’ll be covering all the important HSN codes. We will be attending the Gulfood F&B show in a major way. We’re basically trying to take a multi-pronged approach to hosting buyer-seller meetings, but at the same time, getting the most out of all the shows that are going on here.

The country is a great center for exhibitions and performances. So we’re trying to get as big a delegation as possible. We also tried to give Xiaomi a big presence because this year is the year of Xiaomi and for India, Xiaomi is very important. We will also launch Xiaomi delicacies in several restaurants and do special roadshows. How is the grid transmission line between India and UAE progressing? India’s power minister said the two countries were close to reaching an important agreement. When will it appear and can you share details of the proposed project?

This was discussed a few days ago when our Minister of Power, RK Singh, was here. He had a very pleasant meeting with Suhail al-Mazrouei, UAE Minister of Energy. The idea we are working on is to build a submarine cable linking the UAE and India.

So if that happens, then the entire GCC is actually connected to India. India is a huge market. GCC already has its grid and this grid is running; so, when we connect this grid, we are actually connecting all these countries. So, that’s the plan, and for that, we’re planning to launch a feasibility study, which we’ll announce in the next 15 days. It’s not done so far, but we’re not far from it. Prime Minister Narendra Modi has entrusted the One World, One Sun, One Grid (OSOWOG) mission. So, the idea was, let’s all generate clean energy and share it as the sun moves. If we connect the grids of East and West India, then we are doing this trade. Also in India, we are developing the ability to operate the grid at higher voltages. So, we’ve reached 800 KV. We are now doing 1200KV test to reduce loss.

A consortium of Indian oil companies led by ONGC Videsh Ltd (OVL) is in talks to buy a stake in ADNOC’s hydrocarbon assets, with discussions facilitated through G2G talks. When is the transaction expected to close and what is the likely size of the transaction?

ONGC Videsh already owns 10 percent of Lower Zakum as part of a consortium with IOCL and BPRL, in a deal signed in 2018. Our company is always very willing to acquire more shares when the opportunity arises. Two of our companies, IOCL and BPRL, are also exploring in Area 1 of Abu Dhabi.

How far have talks on rupee-dirham trade settlement progressed? When do we expect to reach an agreement on this?

India shared a concept paper with the UAE in November. Discussions now go well beyond the scope of the concept paper. The Reserve Bank of India is actively negotiating with the Central Bank of the UAE and they are discussing the matter.

Technical discussions are ongoing. We believe that the INR-AED mechanism will facilitate transactions, reduce transaction costs and reduce the risk of large transactions. The idea is to do this as quickly as possible. It must be a powerful mechanism. It will be done incrementally, we open a few banks on both sides and then expand.

Our central bank is talking about it, and I’m going to talk about it.