In the backdrop of the Farmer’s Protest (Kissan Andolan), India and UAE have signed an ambitious $7 billion Food Corridor agreement according to which UAE will invest billions of dollars in a food processing complex in India which will purchase foodgrains, fruits and vegetables directly from 22 lakh farmers in Punjab, Madhya Pradesh, Uttar Pradesh and Gujarat. The project is the cornerstone of the Arab nations Food security strategy and for it to work, India’s new farming laws will remove the middlemen from the equation. The project is seen to be implemented under the umbrella of the Abraham Accords – the Israel-UAE peace agreement.
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India-UAE Food Corridor Project
According to the agreement, UAE entities would invest up to $7 billion (Dh25 billion) in India’s food sector over three years as part of the UAE-India food corridor project that aims to secure the Gulf country’s food security needs.
The high end, value added products will be exported to the UAE and other Middle East countries through an exclusive food corridor. The project will involve contract farming on a large scale and will be implemented by Indians both within India and working in UAE.
Eight food processing units to be set up in the Indian state of Madhya Pradesh with funding from UAE.
This will also extend to managing the food supply chains. For instance, DP World is exploring “synergies” for offering integrated supply chain solutions, while DMCC’s (Dubai Multi Commodities Centre) has an agriculture trading platform – ‘Agriota’ – inking farmers in India with food companies in the UAE.
This was confirmed by Juma Al Kait, Assistant Undersecretary – Foreign Trade Affairs at UAE’s Ministry of Economy at the India-UAE Food Summit in Dubai and Piyush Goyal, Indian Minister of Commerce and Industry.
“Entities in the UAE have expressed their interest to invest up to $5 billion in mega food parks, logistics and warehouse hubs, fruits and vegetable hubs in various Indian cities, which would create 200,000 jobs across India,” Piyush Goyal, Minister of Commerce and Industry, said last year during a visit to UAE.
The remaining $2 billion would be geared towards contract farming, sourcing of agro commodities and related infrastructure, Goyal said.
India’s Farm Laws & UAE’s Food Security
For the Food Corridor Project to work, India’s new farming laws will remove the middlemen from the equation, said Sharafuddin Sharaf, Vice-Chairman of Sharaf Group.
“The Indian government is taking major initiatives that aim to boost India’s food trade, including new laws introduced to empower farmers in India by giving them direct access to the market and self-reliant packages,” said Sharaf.
“Given the current regime of transparency and time bound responses by the Government, the gestation period for projects will surely reduce further.
“We as investors have already started to put into place our business plan,” said Sharaf. “We’re not only providing logistics services, but actually permitting our investments on the ground in India to build multi- modal logistics facilities, including rail depots.”
The Food Corridor Project is the cornerstone of the Arab nations National Strategy for Food Security 2051 – a long-term strategy to enable the fast-growing population of the Arab economic powerhouse access to healthy, safe, nutritious and sufficient food at reasonable prices in all circumstances, including unprecedented crisis.
The India-UAE Food Corridor project is seen to be implemented under the umbrella of the Abraham Accords – the recently signed Israel–United Arab Emirates normalization agreement, officially the Abraham Accords Peace Agreement: Treaty of Peace, Diplomatic Relations and Full Normalization Between the United Arab Emirates and the State of Israel.
When details of the Abraham Accord were announced in August, India became one of the first countries to welcome the deal between the UAE and Israel.
“In a post-Covid, multi-aligned, technology-driven world, the UAE, Israel and India, along with the United States, will likely find that they have more common cause than they might have envisioned just a few months ago,” writes Dr N. Janardhan, senior research fellow for the Gulf-Asia Programme at Emirates Diplomatic Academy.
India’s External Affairs Minister Subrahmanyam Jaishankar in his book The India Way – Strategies for an Uncertain World, lists the UAE among the five countries that India must concentrate on while conducting its foreign policy.
India and the UAE, have a fast growing relationship. The UAE is central to India’s extended neighbourhood. We see the UAE on the crossroads of international trade. As Singapore is in the East, UAE is in the West.
It is a relationship where the highest leadership of both countries have invested goodwill and energy. As a result, you can see the transformation during the last five years.