Geopolitics of the Gulf: PM Modi in the UAE

PM Narendra Modi kicked off the first leg of his 5 nation tour on May 15 with a visit to the UAE. This is his 8th visit to the Emirates since assuming office 12 years ago. It comes against the backdrop of the US-Iran War. Both nations have been impacted by the strikes that started on February 28. The UAE has borne the brunt of the drone attacks launched by Tehran, resulting in several fatalities and damaging key infrastructure. India, meanwhile, has been affected in a more indirect manner, with fuel, gas and fertilizer supplies impacted, raising inflationary pressures and straining the rupee. Both nations are therefore looking for ways to avert a crisis. New Delhi wants to buffer up its petroleum reserves, with state-run oil corporations having taken in losses worth over Rs. 30,000 crore since mid-March in order to keep fuel prices stable. On the other side, the UAE wants to ensure its security, especially as the Iranian strikes have shattered its image of a booming tourist hub in an otherwise unstable region. This visit has helped both partners in furthering their economic and strategic ties.

Across the Arabian Sea

Due to their geographical proximity, India’s western coastal areas and the region where the UAE stands today, have had several historical links. The UAE was also under British control in the 19th century, being administered from British India itself. In fact, the Indian rupee was the official currency in the region. This brought forth Indian influence to the sheikhdoms, with significant trade across the Arabian Sea. Initially consisting of pearls and textiles, merchants in Dubai took advantage of high gold prices in India to conduct a booming gold smuggling business.

The emirates' discovery of the ‘black gold’ or oil in 1959, ushered in a new age for the individual emirates. They soon stopped using the Indian rupee and started exporting their oil. In 1971, a unified state, the United Arab Emirates, consisting of seven emirates including Abu Dhabi and Dubai, was born. The new regime expanded its investments in sectors like infrastructure. Demand for labour skyrocketed. India established formal diplomatic relations with the UAE in 1972. Soon, a huge influx of Indians, mainly from Kerala, emigrated to the new Arab nation. This inflow of Indians has continued unabated throughout the decades, giving rise to a large Indian expat community that today sends over $20 Billion worth of remittances each year.

During this period, UAE was part of the US-Saudi bloc, and maintained good ties with Pakistan. They supported Pakistan’s bid for Kashmir at several international forums. Dubai also acted as a hub for illegal smuggling activities and anti-India elements, fueling mistrust. Nevertheless, India imported significant amounts of crude oil, while the UAE continued to receive and rely upon vast numbers of Indian expats to work on its many projects. Both India and the UAE saw high levels of economic growth in this period. This ‘transactional’ phase of the relationship continued until about 2015, defined by high levels of trade, but relatively less political engagement, especially at the highest level.

A New Partnership

The watershed moment in bilateral relations came during PM Modi’s visit to the UAE in 2015. The last Prime Minister to have visited the Emirates was Indira Gandhi 34 years prior. A slew of new initiatives were agreed upon, signalling a new era in bilateral ties. The UAE agreed to invest about 4.5 lakh crore rupees in India, aligning with the ‘Make in India’ initiative. The UAE agreed to back India’s bid for a permanent seat in the UN Security Council. Dialogue mechanisms were also established between the National Security Advisers of both nations. Land was also allocated for the construction of a new Hindu mandir in Abu Dhabi. 

Why did this sudden reset in ties occur? Pakistan had long been the pre-eminent South Asian influencer in the Gulf. Then PM Indira Gandhi had attempted to establish a better relationship, but failed, as the domestic economic situation was not conducive at that time. In 2015, with India’s economy accelerating, a development oriented government in power, the domestic situation had considerably improved. Moreover, there was a strong rapport between PM Modi and the then Crown Prince Mohammed Bin Zayed Al Nahyan, who was UAE’s de facto leader. The UAE was also willing to look at its relationship with India without the Pakistan lens. Therefore PM Modi’s high profile visit acted as the catalyst in giving a new direction to bilateral ties.

The reset was not temporary and bilateral ties continued to improve. Ties were upgraded to a comprehensive strategic partnership in 2017. India was invited as the guest of honour during the 2019 meeting of the Organisation of Islamic Countries, despite Pakistani protests. The UAE also did not oppose India’s move to scrap Article 370, with their Ambassador calling it an internal matter of India. This dealt a diplomatic blow to Pakistan. Notably, within only 88 days of negotiation, a Comprehensive Economic Partnership Agreement (CEPA) was signed in 2022. This has diversified trade beyond energy into other sectors like manufacturing. An agreement to allow Indian rupees in bilateral trade and Rupay cards came about in 2023. The establishment of the India-Middle East-Europe Economic Corridor (IMEC) and the I2U2 framework with the US and Israel also enhanced strategic ties.

Economic ties have reached new highs with bilateral trade crossing $100 Billion in FY24-25. Abu Dhabi is also the seventh largest FDI investor for New Delhi. UAE ranks as India’s third largest trading partner and second largest export destination, highlighting its immense economic importance for India. Indians are now the largest expat group in the UAE, representing 38% of the population. Going forward, the greatest scope for improvement in bilateral ties lies in the defence sector.

Geopolitics of the Gulf

In January 2026, UAE’s President Mohammed Bin Zayed made a quick visit to India. A LNG supply deal worth $3 Billion was signed along with a commitment to double bilateral trade to $200 Billion within six years. The most significant outcome, however, was the signing of a letter of intent for a defence partnership. Why was this important? This is because of an important development in the Gulf, namely the deteriorating relationship between Saudi Arabia and the UAE. This rift was evident when the UAE decided to exit the Saudi-led Organisation of Petroleum Exporting Countries (OPEC) in April 2026. This can potentially help it export more crude oil once the situation in the Strait of Hormuz normalises.

Both nations have pursued an assertive foreign policy in recent years, carving up their own spheres of influence in the wider region. A proxy war between the 2 nations has been going on for a few years now. Once strong allies, their differing approach to the war in Yemen, and their backing of different proxy groups in war ridden nations like Sudan, have complicated the relationship. This puts India in a spot. India has good relations with both nations, but this ever widening rift has had geopolitical implications close to Indian borders. In September 2025, Pakistan and Saudi Arabia signed the Strategic Mutual Defence Agreement (SMDA), formalizing a decades-long security partnership into a NATO like binding pact where any act of aggression against one country will be treated as an act of aggression against both. Significantly, the deal does not bar the use of nuclear weapons for mutual protection.

This has sent shockwaves throughout the Gulf. Pakistan sent its fighter jets to Saudi Arabia in April, when the latter invoked their deal following Iranian drone attacks. This has shifted the security calculus in the Gulf and prompted closer ties between Abu Dhabi and New Delhi. Therefore, even though the war on Iran is the immediate security

threat in the minds of most people, there is also a subtle shift in the strategic equation in the Gulf, lending PM Modi’s 2026 visit to the UAE even greater importance. 

Strategic Ties

Even though the visit was brief in duration, it was significant in outcomes. The visit saw investment announcements worth a total of $5 Billion by the UAE. Collaborations in the AI, maritime and ship repair sectors were also explored. Significantly, the Abu Dhabi National Oil Company (ADNOC) agreed to send up to 30 million barrels of crude oil to India’s Strategic Petroleum Reserves (SPR). This can help alleviate a major shortage of fuel and cool down rising inflation.

Most importantly, an Agreement on Framework for the Strategic Defence Partnership was signed. This is expected to boost military cooperation in areas such as defence technology, maritime security, intelligence sharing and joint exercises. This will transform the economic relationship into a broad strategic partnership with strong security dimensions, potentially acting as a counter to the Saudi-Pakistan alliance.

New Delhi and Abu Dhabi must work on furthering this strategic partnership in the coming years. In an increasingly multipolar world where alliances are shifting and foreign policy does not remain static, this bilateral relationship can act as a strong strategic partnership between middle powers, ensuring mutual security and trade.