The City of Gold may be losing sheen, but there's opportunity for India.

The ruler

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of Dubai, Sheikh Mohammed bin Rashid al Maktoum, is fond of narrating one story about his father. When Jebel Ali was being dredged in the late seventies to turn the small trading post into one of the largest ports in the world, there was widespread scepticism that Dubai was being built too fast. The standard refrain was, who would come. Sheikh Rashid, the man who conceived modern Dubai, then told everyone, "If you build it, they will come." The small village has become the largest man-made harbour in the world, spread over 134 km and the biggest port in West Asia with 67 berths. Its free zone is home to 5,500 companies from 120 countries. Sheikh Rashid's principle has been emulated by his son, the real architect of Dubai, who turned the desert into a glittering metropolis boasting of the world's tallest tower and a planned six-runway, largest airport. It has built the biggest man-made islands just off the coast. One of the seven emirates of the United Arab Emirates, Dubai's hundreds of world-classs towers are not built on oil money. In fact, it has very little oil. It's built on the idea of one man to set up a world-class city. When Sheikh Mohammed wanted to bring in investments, he opened property ownership to foreigners, something that was unheard of in West Asia. Money poured in from the region and elsewhere in the world. HSBC estimated in 2008 that $500 billion in projects were under construction, and another $500 billion were planned. And then in December recession struck, triggered by the crises in the US. Dubai's troubles are serious. The construction sector has collapsed and property prices are down by almost 60 per cent. Dubai had to be helped by Abu Dhabi, the UAE's capital, with a $10 billion loan from the central bank.

According to Deutsche Bank, the emirate must repay $15.8 billion of bonds maturing this year and $9.2 billion, $189.2 billion and $17.3 billion in the next three years, respectively. It has sought delay in repayments. India, with its $286 billion and growing foreign exchange reserve that's recently launched it on gold buying spree from the International Monetary Fund, should step in and help Dubai overcome its debt troubles. By doing so, India can set up the foundation of a successful outpost made so familiar by the thousands who land up on its shores every month in search of a future. Dubai's march from a sleepy little town to a global city is closely linked with India's recent history. Many of the early businesses in Dubai were set up by a set of 35 Sindhi families from India, who were later offered citizenship by Sheikh Rashid. The Indian rupee was legal tender in Dubai till 1966, when the Reserve Bank of India devalued it, though it remained an acceptable currency for many years thereafter. India's closed economy and its people's propensity to buying gold allowed Dubai to function as a hub for the yellow metal, smuggled out to the sub-continent. For years, Indians have comprised a majority of the population of the UAE, now over four million strong. Indian professionals continue to be the backbone of the banking, financial, media and advertisement sectors. Dubai's vertiginous towers were built by Indian labour. With such close links, India needs to think about expanding its sphere of influence to a region that largely looks upon the west for direction. There will never be a better opportunity.