Prime Minister’s Visit to the UAE

Syllabus: GS2/IR

Context

• PM Modi made a landmark diplomatic stopover in UAE, first stop in his five-nation trip to the Netherlands, Sweden, Norway and Italy.

Key Outcomes

• MoU on Strategic Collaboration between Indian Strategic Petroleum Reserves Limited (ISPRL) and Abu Dhabi National Oil Company (ADNOC).
  • Potential ADNOC crude oil storage in India’s Strategic Petroleum Reserves upto 30 million barrels.
  • Potential storage of crude oil in Fujairah, UAE, to form part of the Indian strategic petroleum reserve.
  • Potential collaboration in Liquid Natural Gas and Liquid Petroleum Gas storage facilities in India.
• Strategic Collaboration Agreement between Indian Oil Limited (IOCL) Company and Abu Dhabi National Oil Company (ADNOC) on supplies of Liquified Petroleum gas (LPG).
  • Explore potential opportunities in the sale and purchase of LPG, including long term supply of LPG, and entry into a long-term LPG sale and purchase agreement between ADNOC Gas Limited and IOCL.
  • The collaboration will strengthen India’s long-term LPG supply security.
• Framework for the Strategic Defence Partnership: 

• MoU between Cochin Shipyard Limited (CSL) and Drydocks World (DDW) on setting up a Ship Repair Cluster at Vadinar, Gujarat.
  • Cooperation includes offshore fabrication, under the Maritime Development Fund Scheme launched by the Government of India.
• MoU between Cochin Shipyard Limited (CSL), Drydocks World (DDW) and Centre of Excellence in Maritime & Shipbuilding (CEMS) on Skill Development in Ship Repair.
• Term Sheet for setting up 8 Exaflop Super Computing Clusters in partnership between CDAC, India and G-42, UAE.
  • Pave the way for collaboration between CDAC and G-42 to set up a super computing cluster as part of AI Mission India.
• Investment from UAE to India: Abu Dhabi Investment Authority (ADIA) and National Infrastructure & Investment Fund (NIIF) of India to explore investments upto US$ 1 bn in India’s infrastructure sector.

Bilateral Ties Between India and UAE

• Political: India and the United Arab Emirates (UAE) established diplomatic relations in 1972.
  • Relationships were upgraded to a Comprehensive Strategic Partnership (CSP) in 2017.
• Trade and Investment Ties: Bilateral merchandise trade between the two countries crossed US$100 billion for the first time, reaching US$101.25 billion in FY 2025-26.
  • Both sides have committed to doubling bilateral trade to US$200 billion by 2032.
  • The two nations signed the Bilateral Investment Treaty in 2024. 
  • From 2000 to 2025, the cumulative FDI from the UAE into India amounted to US$25.19 billion, making UAE the seventh-largest overseas investor in India. 
• Energy Trade: In FY 2024-25, the UAE stood as the fourth largest source of crude oil, third largest source of LNG, largest supplier of LPG and second largest export destination for India’s finished petroleum products.
  • Currently, the UAE is the only country participating in India’s Strategic Petroleum Reserve programme

• Defence cooperation: It  is steered through a Joint Defence Cooperation Committee (JDCC) at the Ministry level, with the signing of Agreement on Defence Cooperation in 2003, which came into effect in 2004.
  • Extradition and mutual legal assistance treaties to combat transnational crime.
• Space Cooperation:  Indian Space Research Organisation (ISRO) and the UAE Space Agency signed an MoU regarding cooperation in the exploration and use of outer space for peaceful purposes in 2016.
• Indian Community: Indian expatriate community of approximately 3.5 million is the largest ethnic community in UAE constituting roughly about 35% of the country’s population.
• Multilateral Cooperation: India and the UAE are currently part of several plurilateral platforms such as India-Middle East EU Economic Corridor (IMEC),  I2U2 (India-Israel-UAE-USA) and UFI (UAE-France-India) Trilateral, etc.

Challenges

• Trade Imbalances: India has a trade deficit with the UAE, primarily due to high oil imports from the UAE, which makes the economic relationship uneven despite growing non-oil trade.
• Geopolitical Tensions in the Region: Political instability in the Middle East and the Gulf region affect bilateral relations, especially with India’s strategic interests in the region.
• Labor and Migration Issues: India is one of the largest sources of migrant labor in the UAE, and issues related to the welfare and rights of Indian workers have been a point of concern.
• Foreign Policy of UAE: India’s relations with countries like Iran and Pakistan sometimes complicate its relations with the UAE, which maintains different strategic priorities in the region.

Way Ahead

• The relationship between India and the UAE has transformed from traditional trade linkages into a wide-ranging strategic partnership. 
• Today, the partnership spans energy security, trade, technology, investment, and defence cooperation.
• The outcomes of the Prime Minister’s 2026 visit have further strengthened bilateral ties. 
  • As both countries align their economic and geopolitical priorities, the partnership is expected to play a larger role in regional stability, economic growth, and technological advancement.

Source: PIB