India-UAE ties: Infrastructure through strategic economic corridors

This article is authored by TP Seetharam, former ambassador of India to the UAE and Vivek Anand Oberoi, managing director & co-founder, BNW Developments.

Few relationships in global diplomacy mirror the camaraderie and history that the India–UAE partnership has shown. Over 5,000 years, the monsoon winds stitched together our destinies. Indian traders once set sail from Gujarat’s ancient ports with timber and spices, returning with Basra pearl dates. Imagine Indian rupee serving as currency of the Emirates well until the end of the 1960s—a rare alignment of monetary trust that speaks volumes of the intertwined futures we imagined even back then.

India brings the scale; UAE delivers the speed. This formula is unique and just unstoppable (AFP)

Today, this transactional relationship has now matured into a multifaceted partnership with enthusiastic participation of governments from both sides and a number of stakeholders from various sectors. We are building capital corridors and co-developing infrastructure. When Prime Minister (PM) Narendra Modi visited the UAE for the first time in 2015, few could have predicted the extent to which their partnership would evolve. That visit became a pivot point, elevating ties to a Comprehensive Strategic Partnership and setting the stage for deeper trust and mutual admiration. In May 2022, the Comprehensive Economic Partnership Agreement (CEPA) was negotiated and signed within just 88 days—the fastest trade agreement to date—demonstrating the clarity and urgency shared by both nations. Fast forward to April 2025, Sheikh Hamdan bin Mohammed Al Maktoum’s maiden visit to India is a powerful testament to his visionary leadership for the ties shared by both nations. His leadership is marked by a forward-thinking vision, driving the UAE’s transformation into a global hub for innovation and technology. This marks more than the passing of a diplomatic baton; it signals the convergence of two nations.

CEPA has redefined the contours of bilateral engagement. Nearly 90% of India’s exports to the UAE face zero tariffs, giving Indian businesses a competitive edge in the UAE’s entrepôt trade. While the trade volumes have doubled, touching $83.7 billion in 2023–24, CEPA’s true intent lies in value creation. 5.33 MMT of crude oil from UAE is now stored in underground facilities in Visakhapatnam, Mangalore and Padur (near Udupi) contributing to India’s Strategic Petroleum Reserves. CEPA reduces transaction costs, enhances predictability, and encourages sectoral diversification. As a result, capital is flowing into areas like clean tech, semiconductors, and advanced logistics, with over 5% of India’s total outward FDI now routed into the UAE.

This unlocks strengths for both the countries, for Indian MSMEs and mid-sized firms, CEPA has created room to scale globally. For Emirati partners, it offers proximity to one of the world’s fastest-growing consumption bases. The two sides have developed a high degree of trust that sheds the tendency of looking at each other through the prism of relationship with third countries.

The continuing rapid growth of air connectivity between the two countries have bound each other more intimately than most immediate neighbours. The role of infrastructure has truly become a lever of growth for both nations, with the signing of eight MoUs, several directly tied to multimodal logistics and smart urban ecosystem co-development. Consider India’s push to reduce logistics costs to below 8% of GDP. The India–UAE Virtual Trade Corridor and the DP World–RITES collaboration reflects this synergy of strengths.

Real estate has shown astounding growth, emerging as a potent force in this relationship as a marker of mutual confidence. CEPA has effectively de-risked cross-border investment and enhanced market access for Indian service providers across 11 sectors, including construction and engineering services, which streamlines real estate development. India directs 32.8% of its capital to the UAE’s real estate. We see rising conviction in emerging hotspots like Ras Al Khaimah, where real estate transactions have risen in volume by 25,000% in seven years. This is a result of an enhanced and streamlined business environment for Indian developers. Similarly, UAE-based sovereign funds and institutional investors are entering our real estate ecosystem with renewed conviction.

The India–UAE relationship today draws from shared history but is powered by shared intent. CEPA is an enabling architecture for capital, trust, and shared ambition. In a world of rising geopolitical uncertainties, the India–UAE story stands out as a rare bright spot — a partnership that doesn’t just navigate challenges, but turns them into opportunities. By drawing on each other’s strengths and ambitions, India and the UAE are shaping a new model for how nations can collaborate with trust and resilience, culminating in a genuine sense of shared destiny. And here, on UAE soil, the Indian diaspora – a vibrant tapestry where diplomats and we entrepreneurs intertwine – weaves its dedication into this alliance. Our collective spirit is a powerful current propelling both our nations towards a shared horizon of greatness.

This article is authored by TP Seetharam, former ambassador of India to the UAE and Vivek Anand Oberoi, managing director & co-founder, BNW Developments.