The Modi government’s proactive outreach to UAE is beginning to pay rich economic dividends. Companies such as Emaar, DP World and others are building a massive food corridor that will ensure food security in the Gulf state and benefit 2 million farmers in India.
The Narendra Modi government’s proactive outreach to and strategic tango with the Arab states in the Middle East is beginning to pay rich dividends.
If, as many critics in India had said, the award last year by the United Arab Emirates (UAE) of its highest honour, the Order of Zayed, on Modi was about optics, then the announcement that that the Gulf monarchy will invest $7 billion in a food corridor connecting the two countries is a clear indication of the concrete benefits that are beginning to flow from the relationship.
An Indian-owned business conglomerate in Abu Dhabi, the Lulu Group, is planning to invest $8 million in setting up cold storage and sorting facilities in the Union Territory of Jammu & Kashmir to facilitate the export of fruits and vegetables grown in the state.
The group already imports the world famous Kashmiri apples and saffron from the UT into the UAE. Last year, the business was worth about $3.3 million. Executives in the group estimate that this figure will rise several folds following the above investment.
This is just one small example of how the food corridor can help farmers and industry in India and generate fresh jobs along the food processing value chain – from the farm gate to facilities that sort, store and process the farm produce, not only in J&K, but also in other states that are covered by this project.
Shah Jahan, Director, Hyacinth Agro Products Pvt Ltd, which exports cherries, walnuts, walnut kernel and wazwan (a ready to eat non-vegetarian delicacy) from Kashmir, is very optimistic about the food corridor.
“Dubai itself is a big market with a cosmopolitan crowd. Then, it is also a gateway to other big consumption centres in the Middle East. If, as promised, the government provides proper subsidies on air cargo, it will provide a big fillip to food products exports from Kashmir and the rest of the country,” he told IGB.
If this project is successful, it can become the template for future projects in the food processing / contract farming sectors and give a massive boost to the farm reforms undertaken by the Modi government.
“The UAE-India partnership in the food sector has immense untapped potential and can further strengthen food security not only in UAE but the entire MENA region, besides increasing food exports from India. UAE’s investments into Food Parks and the entire supply chain will improve certainty of supplies and improve productivity and efficiency in the Indian food sector landscape. With this summit, we hope to take this partnership to the next level,” Dr Aman Puri, Consul General of India had said in Dubai.
Last year, India’s Commerce Minister Piyush Goyal had announced that UAE companies “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”.
That figure has now risen to $7 billion with the investors looking to pour in an additional $2 billion in contract farming, agri-sourcing and building related infrastructure. Companies like the Emaar Group, which has a large presence in the Indian real estate sector, DP World and others are setting up or planning to set up mega food park projects places like Kutch (Gujarat), Aurangabad (Maharashtra), Pawarkheda (Madhya Pradesh), a fruits and vegetables hub in Nashik (Maharashtra), a logistics and warehouse hub in Itarsi (Madhya Pradesh), and another warehousing hub in Bhiwandi (Maharashtra). Eight other food parks are also under consideration, he said.
This will enhance food security both in India as well as in the UAE as 30 per cent of agricultural produce is wasted every year because of the lack of adequate infrastructure. This is particularly galling as 60 per cent of India’s 1.3 billion population depends on the agricultural sector, which accounts for 18 per cent of the country’s GDP, for sustenance.
The Modi government has identified food processing as a priority sector as value addition and better price realisation at the farm gate will help it reach its target of doubling farmers’ incomes.
The India-UAE food corridor, for instance, will benefit as many as two million farmers across various Indian states and generate as many as 200,000 additional jobs over the next three years.
Speaking to PTI on the side lines of a recent conclave on the Indo-UAE Food Corridor, Majid Aslam Wafai, President of the Jammu & Kashmir Apple Cold Store Association said his delegation was in Dubai to explore and understand Gulf markets as the Indian government was keen to see the Kashmiri apple in the Gulf food basket.
“We had a very fruitful meeting with the Dubai Chamber of Commerce, which was headed on our side by Principal Secretary Navin K Chaudhary. We have received positive feedback during this meeting and we hope to leverage this to ensure supply to this part of the world,” Wafai said.
Interestingly, the Government of Punjab, which is opposing the farm reforms ushered in by the Modi government to encourage greater value addition, ease contract farming and eliminate middlemen from the food value chain to enhance farmers’ incomes, was present at the conclave in Dubai.
Punjab’s Minister for Sports and Youth Affairs invited investors from the UAE to invest in the food processing sector in the state, which is also known as India’s food basket.
This project is yet another milestone in the close relationship between India and the UAE and provides the required economic heft to a relationship that already has a robust strategic-security angle.