India–UAE relations have witnessed remarkable growth since 2014, with Prime Minister Narendra Modi visiting the Emirates seven times. The relations encompass trade, investment, energy, technology, defence and security cooperation at the bilateral level. Both countries are also essential elements of mini-lateral groupings like the I2U2, along with the United States and Israel.
Under the leadership of Prime Minister Narendra Modi since 2014, India's interaction with the UAE has witnessed a remarkable expansion across various sectors. The UAE has emerged as the most important pillar of India’s outreach to the Gulf region. While India’s ‘Think West’ policy has prioritised India's engagement with West Asia, its relationship with the UAE has outpaced India’s relationships with other countries of the region. Modi’s seventh visit to the UAE during his tenure of 10 years as Prime Minister reflects a personal initiative and efforts to strengthen the relationship. The scope and intensity of engagement between the two countries can be measured by Modi's statement that “India and the UAE are partners in progress.”1
An important element of India’s engagement with the UAE is the constant growth in bilateral trade and investment. Although economic engagement remains the conventional mode of interaction between the two, its pace and scope have expanded significantly in recent years. The UAE remains the third largest trading partner of India after the US and China. In the last 10 years, bilateral trade figures have increased from US$ 59.5 billion in 2013–2014 to US$ 84.8 billion in 2022–2023.2
Bilateral trade received a big boost after both countries signed the Comprehensive Economic Partnership Agreement (CEPA) in 2022. As part of the CEPA, the existing UAE–India Bilateral Investment Agreement signed in December 2013 would be replaced with a new council called the UAE–India Technical Council on Investment and Trade Promotion. The main objectives of the Council are to enhance bilateral trade, facilitate investment and remove trade barriers between the two countries. In May 2023, on the first anniversary of the signing of the CEPA, the government of India noted that the bilateral trade has grown from US$ 72.9 billion in 2021–2022 to US$ 84.8 billion in 2022–2023, which is an increase of 16 per cent.3
There is a remarkable growth in the foreign direct investment (FDI) received by India from the UAE. In his meetings with the Gulf leaders, Prime Minister Modi has always appealed to them to invest in India. India realises that the oil-rich Gulf monarchies have huge sovereign wealth funds (SWF) and they have the capacity to invest in India. Modi has engaged with them and assured them to provide a secure investment environment in India.
In multiple visits and meetings with the Gulf leaders, Modi has been successful to a large extent in inviting FDI from the region. FDI from the UAE remains the highest and covers multiple sectors such as telecom, infrastructure, energy, etc. At present, the UAE is the 7th largest investor in India. From April 2000 to December 2022, the UAE has invested over US$ 15.32 billion in India in different sectors.4 Modi government’s ‘Make in India’ policy and its focus on the ‘Ease of Doing Business’ environment has improved India's standing in the ease of doing business index from 142 in 2014 to 79 in 2020.5
The UAE is also a major oil supplier for India and a major partner for India’s energy security. It is a crucial country for India’s Strategic Petroleum Reserve (SPR). In January 2017, during Modi’s visit to the UAE, the Indian Strategic Petroleum Reserves Ltd (ISPRL) and the UAE’s Abu Dhabi National Oil Company (ADNOC) signed agreements for crude oil storage in the Mangalore facility.6 The UAE is the first country to join India’s SPR........