Siddharth Roy
(siddharth001.roy@gmail.com)
Prime Minister Narendra Modi's recent visit to the United Arab Emirates has once again underscored the growing strategic importance of India-UAE relations in an increasingly uncertain global environment. What was once primarily an energy-driven relationship has now evolved into a comprehensive strategic partnership encompassing defence cooperation, infrastructure investment, trade, technology, maritime security, and geopolitical coordination. At a time when West Asia is witnessing heightened instability and global energy markets remain volatile, the agreements signed during the visit carry significance not only for bilateral ties but also for India's long-term economic and strategic security.
During the visit, India and the UAE signed a series of agreements covering defence cooperation, gas supply, strategic petroleum reserves, infrastructure investment, and technological collaboration. The UAE also announced investments worth $5 billion in Indian infrastructure and financial institutions. These developments reflect the remarkable transformation of bilateral ties over the last decade, particularly after Mr Modi's first visit to the UAE in 2015, the first by an Indian Prime Minister in 34 years. Since then, political engagement between the two countries has intensified considerably, with cooperation expanding into areas that were previously peripheral to the relationship.
The importance of the UAE to India can scarcely be overstated. The UAE is among India's largest trading partners and one of its most important energy suppliers. Bilateral merchandise trade crossed $100 billion for the first time in FY 2025-26, while both countries aim to raise trade to $200 billion by 2032. Equally important is the presence of more than 4.5 million Indians living and working in the UAE, making it home to one of the largest Indian diasporas in the world. Remittances from the Gulf continue to contribute significantly to India's foreign exchange reserves and household economies.
However, the most consequential aspect of the recent visit relates to energy security. India imports nearly 90% of its crude oil requirements, making it highly vulnerable to geopolitical instability and disruptions in global energy supply chains. The ongoing conflict in West Asia, particularly the tensions surrounding Iran and the Strait of Hormuz, has once again exposed the fragility of global oil transportation routes. Oil prices have remained volatile, while fears of supply disruptions have intensified among major importing economies.
In this context, the agreements signed with the UAE assume exceptional importance. India and the UAE concluded Memorandums of Understanding on strategic petroleum reserves and enhanced liquefied petroleum gas (LPG) supplies. The UAE is already the only country participating in India's Strategic Petroleum Reserve programme through the Abu Dhabi National Oil Company (ADNOC). Reports suggest that ADNOC may further expand crude storage in India up to 30 million barrels, substantially strengthening India's emergency energy reserves.
The strategic significance of such reserves becomes evident during periods of global crisis. Strategic petroleum reserves function as buffers that allow countries to maintain essential fuel supplies during disruptions caused by war, sanctions, shipping blockades, or sharp price increases. Given the present instability in the Gulf region, India's effort to secure long-term crude oil and LPG arrangements with the UAE is both economically prudent and strategically necessary.
The LPG agreements are particularly important for Indian households. Cooking gas has become central to domestic welfare schemes and energy access programmes across India. Any prolonged disruption in LPG imports or sudden increase in prices can directly affect millions of families, especially lower-income households. Long-term supply arrangements with the UAE can therefore help stabilize domestic energy markets and reduce the economic burden arising from global volatility.
The broader geopolitical context also explains why India-UAE relations are deepening rapidly. West Asia is undergoing major strategic realignments, with regional rivalries, shifting alliances, and security uncertainties reshaping the geopolitical landscape. India's foreign policy has increasingly focused on maintaining balanced and pragmatic relations with all major regional actors, including the UAE, Saudi Arabia, Iran, and Israel. The UAE, in particular, has emerged as a reliable and stable partner for India at a time when energy routes and maritime security have become critical strategic concerns.
Defence cooperation formed another major pillar of the recent visit. India and the UAE signed a strategic defence partnership framework covering defence industrial collaboration, joint training, advanced technologies, maritime security, cyber defence, and secure communications. This marks a significant evolution in bilateral relations. Traditionally, India's Gulf engagements focused largely on energy and diaspora welfare. Today, the relationship has expanded into defence and security cooperation, reflecting the growing strategic convergence between the two nations.
Maritime security cooperation is particularly relevant in the current environment. The Strait of Hormuz remains one of the world's most critical energy chokepoints, through which a substantial portion of global oil trade passes. Any disruption there has immediate consequences for India's economy. India has already launched maritime security initiatives to protect energy routes and Indian shipping amid regional instability. Closer coordination with the UAE can therefore strengthen regional stability and ensure safer energy transportation corridors.
Another notable aspect of the India-UAE partnership is the increasing diversification of cooperation beyond hydrocarbons. The recent discussions covered artificial intelligence, supercomputing, digital infrastructure, renewable energy, logistics, and financial connectivity. The Local Currency Settlement mechanism between the Indian rupee and the UAE dirham is also strategically important because it reduces dependence on the U.S. dollar and lowers transaction costs in bilateral trade.
Yet the real success of this partnership will depend on how effectively both countries translate agreements into long-term institutional cooperation. India must continue diversifying its energy basket, expanding strategic reserves, investing in renewable energy, and strengthening maritime infrastructure. Dependence on imported hydrocarbons will remain a structural vulnerability for the foreseeable future, particularly during periods of geopolitical conflict.
The India-UAE relationship today represents far more than transactional diplomacy. It has evolved into a multidimensional strategic partnership rooted in economic interdependence, political trust, and shared regional interests. Prime Minister Modi's recent visit signals India's recognition that in an era of global uncertainty, stable partnerships with trusted regional actors are indispensable for economic resilience and strategic security.
At a time when conflicts in West Asia threaten global supply chains and fuel inflationary pressures worldwide, India's agreements with the UAE provide a measure of stability and strategic reassurance. Energy security is no longer merely an economic concern; it is a core component of national security. By strengthening ties with the UAE across energy, defence, and infrastructure sectors, India is seeking to secure not only immediate supplies but also its long-term geopolitical and economic interests in a rapidly changing world.