India, UAE to take economic ties to next level with bilateral investment treaty

Building on their close personal friendship, PM Modi is going to sign big ticket deals with President Mohammed bin Zayed Al Nahyan during his trip to UAE

Published on: Feb 3, 2024, 12:22:15 IST

By Shishir Gupta

Prefer HTon Google

Share via

Copy link

India and UAE will integrate their economies when Prime Minister Narendra Modi signs Bilateral Investment Treaty (BIT) with President Mohammed bin Zayed Al Nahyan during a big ticket visit to Abu Dhabi and Dubai on February 13-14. UAE is the third largest source of FDI into Bharat and seventh largest trade partner of India.

Prime Minister Narendra Modi with UAE President Mohammed bin Zayed Al Nahyan

While the Modi government is tight-lipped about the visit, it is learnt that the PM's trip to UAE will be a milestone as India already has a comprehensive economic partnership agreement with Abu Dhabi from February 2022.

To put the BIT in perspective, the treaty was cleared by the Modi cabinet on February 1 after which UAE became the only country with which India has both CEPA and BIT. Even countries like South Korea, Japan and Singapore have a CEPA with India but no BIT.

It is understood a host of big items are on PM Modi’s agenda apart from his inaugurating the BAPS Hindu Mandir in Abu Dhabi, a Bharat Mart for Indian MSMEs to trade in Dubai and the Indian leader is the keynote speaker at the government summit in Dubai.

PM Modi will have a separate engagement with Sheikh Rashid A Maktoum in Dubai apart from his bilateral engagement with President MBZ. PM Modi shares a close relationship with President MBZ, who surprised everyone when he spoke at the Vibrant Gujarat event this year as the UAE ruler hardly ever addresses any global event including G-20 in India or COP 28 in UAE.

While India is already buying crude from UAE on local currency basis, GAIL last Monday signed an agreement with UAE to purchase 0.5 million metric tons of natural gas from the Emirates.

In 2023, India signed an agreement to purchase 1.2 million metric tons of LNG with the UAE as India look to diversify its gas purchases and not remain dependent only on one country in the Gulf.

The India-UAE bilateral investment will pave the way for Abu Dhabi Investment Authority, a UAE sovereign wealth fund worth over USD one trillion, and another sovereign fund Mubadala Investment Fund, worth nearly USD 500 billion, to invest in big ticket projects in India.

India and UAE are also key partners in the Middle-East Economic Corridor project, which links Mundra Port in Gujarat to Fujairah Port in UAE by sea, then to Saudi Arabia and Jordan by railroad and there on to Europe via sea as the new trade route to rival Chinese new Silk Road project and North-South corridor via Iran.

ABOUT THE AUTHOR
Shishir Gupta
Shishir Gupta is Executive Editor at Hindustan Times and one of India's top journalists covering national security, strategic affairs, foreign policy and geopolitics. Over the past three decades, he has extensively reported on India's military, diplomatic and security landscape, covering every major conflict and national security challenge, from the 1999 Kargil War and the 2020 East Ladakh standoff to Operation Sindoor in 2025. He has also covered major terror attacks, including the IC-814 hijacking, the 26/11 Mumbai attacks and the 2025 Pahalgam terror strike, along with numerous Pakistan-backed terrorist incidents in the Kashmir Valley and across India. He has reported on national and state elections for more than three decades. A recognised authority on strategic affairs, Gupta has covered India's nuclear programme since the Pokhran-II (Shakti series) tests in May 1998 and has written extensively on global nuclear issues, Indian diplomacy and the country's expanding global outreach. He has also reported widely on international conflicts and terrorism, with a special focus on the Indian subcontinent. Gupta has interviewed Prime Minister Narendra Modi more than four times, including Modi's first interview with the print media after becoming Prime Minister in May 2014. His other interviews include three with the Dalai Lama, as well as conversations with Benjamin Netanyahu, Amit Shah, Yogi Adityanath, S. Jaishankar, Nirmala Sitharaman and Piyush Goyal. He is the author of Indian Mujahideen: The Enemy Within (Hachette, 2011) and Himalayan Face-off: Chinese Assertion and Indian Riposte (Hachette, 2014). He was awarded the Chevening-Wolfson Joint Scholarship at Wolfson College, University of Cambridge, UK, in 1998 and participated in the International Visitor Leadership Program (IVLP) of the US State Department in 2006. He received the Ben Gurion Prize from Israel in 2011 and the K. Subrahmanyam Prize for Strategic Studies in 2015 from the Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA). Since 2024, he has hosted Point Blank, Hindustan Times' weekly YouTube show on global geopolitics.Read More

Get the latest India News, breaking headlines and real-time updates from across the country. Stay informed about politics, government policies, crime, weather and major national developments.