India-UAE Relations – Strategic Partnership Deepens Amid West Asia Crisis

India-UAE Relations Latest News

• The Indian Prime Minister (PM) visited the United Arab Emirates (UAE) during his multi-nation European tour and held talks with UAE President Mohamed bin Zayed Al Nahyan in Abu Dhabi. 
• The visit took place against the backdrop of escalating tensions in West Asia, including Iranian missile and drone attacks on the UAE and concerns over disruptions in global energy supplies through the Strait of Hormuz.
• India and the UAE signed several major agreements (key highlights below), and the UAE also announced investments worth USD 5 billion in India.

India’s Strong Support to UAE Amid West Asia Conflict

• The Indian PM strongly condemned the attacks on the UAE and reaffirmed India’s solidarity with the Emirates.
• Major diplomatic messages:
  • India emphasised the importance of dialogue and diplomacy in resolving the West Asia conflict.
  • India reiterated support for restoring peace and stability in the region, by stressing that the Strait of Hormuz must remain “free, open and safe”.
• Strategic importance of Strait of Hormuz: It is one of the world’s most critical maritime chokepoints as –
  • A large share of global crude oil and LNG trade passes through it.
  • India heavily depends on Gulf energy imports routed through this passage.
  • Any disruption directly impacts India’s energy security, inflation, shipping costs, food and fertiliser supply chains.

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Energy Security as the Central Focus

• Strategic petroleum and LPG agreements: Energy security emerged as the most significant outcome of the visit.
• India-UAE energy partnership: The UAE is –
  • India’s 4th-largest crude oil supplier.
  • India’s largest supplier of LPG, meeting nearly 40% of India’s LPG requirement.
• Key agreements signed:
  • ISPRL–ADNOC strategic collaboration:
    • UAE participation in India’s Strategic Petroleum Reserves (SPRs) to increase to 30 million barrels.
    • India currently maintains strategic reserves through underground facilities at Visakhapatnam, Mangaluru, and Padur. In 2018, ADNOC stored over 5 million barrels of crude oil in India’s Mangaluru SPR facility.
    • Possible collaboration on the LNG storage facilities, LPG storage facilities, strategic gas reserves in India.
    • Significance: Strengthens India’s energy resilience during geopolitical crises, reduces vulnerability to supply disruptions, and enhances strategic autonomy in energy management.
  • Long-term LPG supply agreement: A separate agreement between the IOCL and the ADNOC to ensure long-term and stable LPG supply, support India’s domestic cooking fuel demand, and help stabilise prices and supply chains.

Defence and Security Cooperation

• Framework for strategic defence partnership: India and the UAE finalised a framework agreement to deepen defence cooperation.
• Areas of cooperation: Defence industrial collaboration, innovation and advanced technology, joint training and military exercises, maritime security, cyber defence, secure communications, etc.
• Strategic significance:
  • Reflects India’s growing security engagement in the Gulf region.
  • Enhances maritime cooperation in the Indian Ocean Region (IOR).
  • Supports India’s objective of safeguarding sea lanes and energy routes.

Maritime and Shipping Cooperation

• Shipbuilding and ship repair cluster: MoUs between the Cochin Shipyard Limited and the Drydocks World for the – 
  • Establishment of a ship-repair cluster at Vadinar, Gujarat.
  • Offshore fabrication facilities under India’s Maritime Development Fund Scheme.
  • Skill development initiatives in ship repair and shipbuilding.
• Importance: Boosts India’s maritime economy. Supports the Sagarmala vision. Positions India as a global maritime services hub. Generates skilled employment.

Technology and Digital Cooperation

• Supercomputing and AI collaboration: Partnership between the C-DAC and the G42 for setting up an “8 Exaflop Supercomputing Cluster”.
• Significance: 
  • Enhances India’s AI and high-performance computing capabilities. 
  • Supports research in the AI, climate modelling, defence simulations, and big data analytics. 
  • Reflects emerging India-UAE cooperation in frontier technologies.

Trade and Connectivity Initiatives

• Operationalisation of virtual trade corridor: India and the UAE operationalised a Virtual Trade Corridor under the MAITRI framework.
• Objectives: Link customs and port authorities digitally, reduce logistics costs, cut cargo transit time, and improve customs coordination and trade efficiency.
• Importance: Deepens commercial integration, facilitates ease of doing business, and strengthens India’s role in global supply chains.

UAE Investments in India

• Announcement: The UAE announced investments worth USD 5 billion in India.
• Investment components:
  • Abu Dhabi Investment Authority (ADIA) and NIIF: Up to USD 1 billion in Indian infrastructure.
  • Emirates NBD: USD 3 billion investment in RBL Bank.
  • International Holding Company: USD 1 billion investment in Sammaan Capital.
• Importance:
  • Reflects UAE’s long-term confidence in India’s growth story.
  • Supports infrastructure financing and banking sector expansion.
  • Strengthens bilateral investment partnership.

India-UAE Relations

• Overview:
  • India and the UAE established diplomatic relations in 1972. These relations gained a new momentum to a new Comprehensive and Strategic partnership when the Indian PM visited UAE in 2015.
  • Underpinned by the India-UAE Comprehensive Economic Partnership Agreement (CEPA), bilateral trade exceeds $100 billion.
  • UAE is India’s third largest trading partner after China and US, while UAE is the second largest export destination of India (after the US).
  • Both nations cooperate in multilateral groups like I2U2 (India, Israel, UAE, US) and are key stakeholders in the India-Middle East-Europe Economic Corridor (IMEC). 
  • The UAE hosts the largest Indian diaspora (3.5 million) and is a primary source of India’s foreign remittances. 
• Strategic significance: Growing Comprehensive Strategic Partnership, and Gulf outreach under India’s “Link West Policy”.

Challenges and Concerns

• Regional instability in West Asia: Escalating Iran-UAE tensions threaten energy supply chains. Risk of disruption in the Strait of Hormuz. Attacks on shipping routes and energy infrastructure can destabilise global trade.
• India’s energy dependence: Heavy reliance on Gulf imports exposes India to geopolitical shocks.
• Balancing regional diplomacy: India must maintain balanced relations with UAE, Iran, Saudi Arabia, and Israel, without compromising strategic interests.

Way Forward

• Diversify: Energy sources and suppliers.
• Expand: Strategic petroleum reserves.
• Accelerate: Renewable energy transition.
• Improve: Maritime domain awareness.
• Promote: Joint production and defence technology transfer.
• Improve: Logistics integration through digital corridors and port modernisation.
• Continue: Strategic engagement with all major regional powers.

Conclusion

• The latest India-UAE agreements reflect the transformation of India-UAE ties from a traditional energy relationship into a multidimensional strategic partnership.
• This will have significant implications for regional stability, economic growth and India’s global strategic positioning.

Source: TH | IE | IE