ABU DHABI: India and the United Arab Emirates (UAE) agreed on the framework for a strategic defence partnership on Friday during Prime Minister Narendra Modi’s visit to the Gulf nation, according to the Indian foreign ministry. The development comes as both countries seek to deepen bilateral ties amid the ongoing Iran war.
India and the UAE also signed agreements on strategic petroleum reserves and the supply of liquefied petroleum gas, the ministry said in a statement. These pacts are aimed at strengthening long-term energy cooperation between the two sides.
Under the strategic defence partnership framework, both countries have agreed to deepen defence industrial collaboration and expand cooperation in innovation and advanced technology, training, military exercises, maritime security, cyber defence, secure communications, and information exchange, the statement added.
In the energy sector, the agreement includes a potential increase in Abu Dhabi National Oil Company (ADNOC) crude oil storage in India for up to 30 million barrels, according to a separate statement from the UAE state oil firm. The deal also explores possible crude storage arrangements in the UAE’s Fujairah, as part of India’s strategic petroleum reserve strategy.
ADNOC further said it would explore expanded liquefied petroleum gas (LPG) supply and trading opportunities with Indian Oil Corporation, strengthening downstream energy cooperation between the two countries.
Commenting on the development, ADNOC managing director and CEO Sultan Ahmed Al Jaber said India’s scale and growth trajectory make it one of the defining energy markets of the present time. He added that as demand rises alongside a rapidly expanding population, the UAE-India energy partnership is becoming increasingly important.
Ahead of Prime Minister Modi’s visit, Indian sources told Reuters that discussions were expected to focus on long-term energy supply agreements with the UAE, as well as support for expanding New Delhi’s strategic oil reserves.
The UAE’s decision last month to exit the Organization of the Petroleum Exporting Countries (OPEC) is expected to increase its output, which could benefit importing countries such as India by improving supply flexibility.
The ongoing US and Israeli war on Iran, now in its third month, has disrupted global energy markets. The conflict has led to the closure of the Strait of Hormuz, a key chokepoint for around 20 per cent of global oil flows. It has also affected transport and business activity across the Gulf, as Iranian strikes hit regional countries including the UAE, before a fragile ceasefire was reached last month.
In January, India and Abu Dhabi had already signed a $3 billion agreement for LNG supply from the UAE, which is India’s third-largest trading partner. They also signed a letter of intent to work toward establishing a strategic defence partnership.
In its statement on Friday, the Indian foreign ministry also highlighted UAE investments worth $5 billion. It referred to earlier deals, including Emirates NBD’s acquisition of a 60% stake in Ratnakar Bank Limited for $3 billion last year, as well as Abu Dhabi’s International Holding Company’s $1 billion investment in Sammaan Capital.