Implications of Modi’s UAE visit

This article is authored by Rajeev Agarwal, senior research consultant, Chintan Research Foundation, New Delhi.

Prime Minister (PM) Modi is scheduled to visit UAE for a short visit on May 15. This would be his eighth visit since his maiden visit in August 2015 and comes at a very critical time not only for India but the entire West Asian region. The ongoing war in Iran, launched by Israel and the US on February 28 through pre-emptive strikes, has morphed into a quagmire from which the hope of finding a peaceful exit look remote with every passing day. The war which is well into the third month is turning out to be the worst ever crisis the world has ever witnessed. Reason--the closure of Strait of Hormuz in the Persian Gulf, a vital lifeline for the energy flows (crude oil, LPG and LNG) to the world, has disrupted global economy like no other crisis and is rapidly crossing thresholds of tolerance in most nations due to the continuing double naval blockade (by Iran and the US, on either side).

Energy Security, Trade, Defence & More: Indian Envoy Reveals Agenda Of PM Modi’s UAE Visit

Against an average flow of around 20 million barrels of oil constituting almost 20% of global oil flow through the Strait of Hormuz before the war, the average outflow has drastically reduced to a trickle. Against an average of 120-130 ships that used to transit the Strait, the numbers have been reduced to single digits. The International Energy Agency has warned that the current crisis is the largest disruption in the history of the global oil market. JP Morgan in its assessment, published by Bloomberg on May 9, has stated that if the oil supplies keep falling, the oil inventories could fall to 6.8 billion barrels by September this year which would then threaten the minimum threshold to keep the oil pipelines and refineries functional across the globe.

On the security front, reports of close cooperation between Israel and the UAE have been proven true when it was confirmed that UAE became the first country where Israel had deployed its Iron Beam, the laser technology-based air defence system which has been hugely successful in intercepting Iranian missiles. The Al Dafra Air Base in the UAE has been one of the main bases from where the US has actively engaged Iranian targets. With battle lines clearly drawn between Iran and the UAE, an early rapprochement is unlikely. In fact on May 5, Iran’s Revolutionary Guards, the IRGC who have established form control in Iran over security issues during this war, published a map establishing a clear zone depicting its naval blockade, bounded by two lines, stretching from Qeshm Island and Umm al Quwain (in UAE) in the West to Mount Mobarak and Fujairah (in UAE) in the East, virtually enclosing the UAE territorial waters within its zone of control.

Equally important if not more is the concern that the economic growth and prosperity which had become the symbol of the UAE in the region over the past three decades is under threat. The continued bombing has led to businesses facing losses and expats returning to their countries. Worst affected are the large US-based companies like Microsoft, Amazon and Google which have been have declared as legitimate targets by Iran in case the war escalates and the US-Israel combo targets Iran’s vital energy and other vital infrastructure. Plus, the severe reductions in flights, tourists and trade is having a direct impact on its economy too.

India UAE relations have emerged as one the strongest and closest bilateral partnerships not only for India but as a model across the globe. UAE was the first country with which India agreed to sign the Comprehensive and Strategic Partnership Agreement in August 2015 during PM Modi’s visit. Similar agreements with many other countries in the region and across the globe followed later, but none has been able to acquire the depth and strength as with the UAE. In February 2022, India and the UAE signed another landmark agreement, Comprehensive Economic Partnership Agreement (CEPA). This landmark agreement, formulated and signed in a record time of 88 days, has laid the foundation for exponential increase in trade and economic partnership. With the target of bilateral trade of $ 100 billion already achieved, the two countries have now set an ambitious target of doubling it to $ 200 billion by 2032.

As a result, UAE now ranks as India's third-largest trading partner and second largest export destination, with exports over $ 36.63 billion in FY 2024-25. Meanwhile, India ranks as UAE’s second largest trading partner, with export of over $ 63.4 billion in FY 2024-25. It is also the fourth largest exporter of oil to India after Saudi Arabia, Russia and Iraq. Investment has also become a significant component of this relationship. The two nations signed the Bilateral Investment Treaty in February 2024 which entered into effect from August 31, 2024. From April 2000 to March 2025, the cumulative FDI from the UAE into India amounted to $ 22.84 billion, making UAE the seventh-largest overseas investor in India.

Energy security forms another key element of strong partnership. After Saudi Arabia, Iraq and Russia (after the onset of war in Ukraine in February 2022), UAE is the fourth largest exporter of crude oil to India. UAE, as a part of its comprehensive strategic partnership, is committed to ensure, under all circumstances, a steady supply of crude oil to India. As a part of this understanding, an agreement was signed during visit of PM Modi to UAE in February 2018. It was signed between Indian Strategic Petroleum Reserves Ltd (ISPRL) and Abu Dhabi National Oil Company (ADNOC) of UAE with an aim to operationalise the filling up of a strategic petroleum reserve caverns by storing crude oil in the ISPRL underground caverns in India. It was due to this reserves that India was in a relatively better position in terms of crude oil supplies as, together with other reserves and diversified supplies, India has been able to manage the energy crisis through the past 65 days of war. Plus, the UAE, through its pipelines opening into the Arabian Sea, has been able to supply around 620,000 barrels of oil per day even during the current war in Iran which has played an important role in India still having almost 60 days of oil reserves.

After a slow start, defence and security too is becoming a key pillar of engagement. Constantly evolving security situation in the region and the fact that the past guarantee of security through the US may no longer be assured, offers greater scope and space for India to play a constructive role in UAE as well as region’s security. There is great convergence on key issues like counter terrorism efforts, intelligence sharing, cyber security and even cooperation in space technology. There are reports that the UAE has expressed interest in the purchase of Brahmos missiles from India, especially after its spectacular success in Operation Sindoor.

During this visit, it is also likely that the framework on Strategic Defence Partnership which was signed during a short visit by the UAE President earlier in January this year, may be converted in a proper deal. This could include close cooperation in defence industry, innovation, and cybersecurity. With Saudi Arabia signing a mutual defence pact with Pakistan in August 2025 and the deepening strain between Saudia Arabia and the UAE clearly evident, it is no surprise that the UAE is looking at independent and more reliable options outside the Gulf and also beyond the American guarantees. Its close cooperation with Israel and its increasing closeness to India indicates a new security paradigm emerging in the region. For India, this may be a good opportunity to get a foothold into an active security architecture in the region. With India-Israel ties already strong and growing, a similar partnership with the UAE, who is already a close ally of both, looks logical. The big challenge for India however would be to maintain its neutrality and strategic autonomy and not get sucked into any future active conflict involving the UAE and any other regional country which is India’s key ally like Saudi Arabia or a traditional and civilisational friend like Iran.

There are many more issues on which India and the UAE collaborate closely likely the digital payment infrastructure (UPI), acceptance of Indian rupee as a legal tender in UAE, the close cooperation on people to people ties given that almost 4.5 million Indians live and work in the UAE and of course, the close personal relationship that both the leaders share.

PM Modi’s regular visits to the UAE are not merely diplomatic engagements; but are a proof of the extraordinary growth in bilateral ties over the past decade. The fact that the UAE President could fly into India on an unannounced visit of three hours in January this year just when the war clouds were gathering over the West Asian region and sign an important document like the framework on Security and Defence Partnership, says a lot. Also, the fact that PM Modi is visiting the UAE on a short stopover visit midst of a war is equally significant. The recent visits of Indian national security adviser, foreign secretary and the external affairs minister to the UAE and reciprocal visits by UAE officials not only speaks of the close bond but also that both nations share a lot on important bilateral and regional security and strategic issues.

In addition to the expected takeaways from the visit, the context and the timing is especially important. The Gulf region today stands at a critical and unprecedented inflection point. Most regional nations don’t know who to trust within the region and even outside. The bubble of American security umbrella has burst. In such a turbulent time, India is definitely being sought as a partner of choice and trust. The UAE is the closest partner and, therefore, it may make the first move. India will, however, have to remain alert, especially to the signals that emanate from the visit.

(The views expressed are personal)

This article is authored by Rajeev Agarwal, senior research consultant, Chintan Research Foundation, New Delhi.