India and UAE sign $3 billion LNG deal, agree to boost trade and defence ties at leaders' meeting.
President of the UAE, His Highness Sheikh Mohamed bin Zayed Al Nahyan visited India on January 19, 2026, for discussion with the Prime Minister of India. During this meeting, both countries signed several agreements covering trade, energy, defence, and technology. The most notable announcement was the target to double bilateral trade from $100 billion to $200 billion by 2032.
This visit shows how India-UAE relations have evolved beyond oil purchases and labor migration. Today, the partnership includes defence cooperation, space exploration, civil nuclear energy, and digital infrastructure. These diverse developments are significant for India's foreign policy and economic growth in the coming years.
$200 Billion Trade Target
India and UAE have had bilateral trade worth $100 billion in FY 2024-25. The Comprehensive Economic Partnership Agreement (CEPA) signed in 2022 helped boost this trade volume. Now both countries are aiming to double it to $200 billion by 2032.
To achieve this goal, they are building new infrastructure. The "Bharat Mart" in Dubai's Jebel Ali Free Zone will be a large distribution hub spanning 2.7 million square feet. It will have 1,500 showrooms where Indian companies can display and store their products. This will assist Indian exporters, especially small and medium businesses, reach customers in Africa, Europe, and the Middle East without going through middlemen.
The Virtual Trade Corridor is another initiative that uses technology to speed up trade. The MAITRI platform connects Indian and UAE customs systems, allowing paperwork to be processed before ships even leave port. This means faster clearances and lower costs for businesses on both sides.
Both countries also discussed the Bharat-Africa Setu initiative, which aims to use the UAE as a gateway for Indian products entering African markets.
Energy Cooperation and LNG Supply
Energy has always been important in India-UAE relations. During the visit, Hindustan Petroleum Corporation Limited signed a deal with Abu Dhabi National Oil Company Gas. Under this agreement, India will receive 0.5 million tonnes of Liquefied Natural Gas (LNG) every year for 10 years, starting in 2028.
This deal helps India reduce its dependence on spot market purchases, which can have unpredictable prices. The UAE is now India's second largest LNG supplier after Qatar. This steady supply supports India's plan to increase the share of natural gas in its energy mix to 15% by 2030.
Beyond oil and gas, both countries agreed to cooperate on civil nuclear energy. India recently passed the SHANTI Act 2025, which allows private companies to participate in the nuclear sector. This opens doors for collaboration with UAE on nuclear reactors, including Small Modular Reactors.
Defence Partnership
The two countries signed a Letter of Intent for a Strategic Defence Partnership. This agreement moves beyond joint military exercises to actual industrial collaboration. The partnership will cover defence manufacturing, technology transfer, training, cybersecurity, and counter-terrorism. By combining UAE's and India's technology and manufacturing capacity, both countries can produce defence products for their own use and for export to other nations.
Technology and Digital Innovation
One interesting outcome from the visit was the discussion on "Digital Embassies." This concept involves setting up data centers in each other's countries where the stored data is treated as if it exists on the home country's soil. This protects sensitive government and business data from cyber attacks and ensures continuity if something goes wrong in one location.
Additionally, India's C-DAC and UAE's G42 company will collaborate to set up a supercomputing cluster in India. This facility will support the AI India Mission and provide computing power for research and commercial projects. Both the public and private sectors will be able to use this infrastructure.
In space cooperation, the Indian National Space Promotion and Authorisation Centre (IN-SPACe) signed an agreement with the UAE Space Agency. This partnership will allow UAE to use India's cost effective launch vehicles for its satellites. Both countries will also build shared infrastructure for satellite manufacturing and incubating space startups.
Investment in Dholera and GIFT City
The Government of Gujarat signed a Letter of Intent with UAE's Ministry of Investment for developing the Dholera Special Investment Region. This project includes plans for an international airport, a maintenance and repair facility for aircrafts, a new port, a smart city, railway connections, and energy infrastructure.
UAE companies are also setting up operations in Gujarat's GIFT City. First Abu Dhabi Bank will open a branch there to help with trade finance and investment flows. DP World will have operations focused on ship leasing, which will help India develop this industry locally instead of relying on other countries.
The Prime Minister of India invited UAE sovereign wealth funds to invest in India's Second NIIF Infrastructure Fund, which will launch in 2026. This kind of long term equity investment helps fund major infrastructure projects across India.
Cultural and Educational Ties
India and UAE agreed to establish a "House of India" in Abu Dhabi. This cultural space will have a museum showcasing Indian art, heritage, and archaeology. On the other hand, the UAE will provide artifacts for India's National Maritime Heritage Complex at Lothal in Gujarat. Lothal is an ancient port city that had trade connections with the Gulf region thousands of years ago.
Education is another focus area. Indian Institute of Technology Delhi already has a campus in Abu Dhabi. The two countries want to expand such collaborations, increase student exchanges, and create joint research programs. They also plan to arrange youth delegate visits so the next generation can build stronger ties.
Conclusion
The January 2026 visit reinforced the India-UAE Comprehensive Strategic Partnership, transforming a relationship historically centered on energy imports and labor migration into a multidimensional alliance. Over the past decade, both nations have progressively deepened cooperation across defence, technology, space exploration, and infrastructure development, recognizing their complementary strengths and shared strategic interests in regional stability and economic prosperity.
UAE's role as India's gateway to Middle Eastern and African markets, combined with India's manufacturing prowess and technological expertise, creates a synergistic partnership that benefits both nations. The emphasis on cultural exchanges, educational collaborations, and people-to-people connections ensures that this strategic relationship rests on a foundation of mutual understanding and respect. As global economic and security landscapes evolve, the India-UAE partnership represents a model of South-South cooperation, where two major economies leverage their geographic positions, economic complementarities, and shared vision to create lasting prosperity and regional influence.
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India-UAE Strategic Partnership FAQs
1. What is the India-UAE bilateral trade target by 2032?
Ans. $200 billion.
2. How much LNG will India receive from the UAE annually?
Ans. 0.5 million tonnes yearly.
3. What will be ‘Bharat Mart’ in Dubai?
Ans. A 2.7 million square feet distribution hub with 1,500 showrooms for Indian products.
4. Where will the House of India cultural center be located?
Ans. Abu Dhabi.
5. Which special investment region will UAE help develop in Gujarat?
Ans. Dholera Special Investment Region.