The United Arab Emirates (UAE) and India formalized a framework for a strategic defense partnership on Friday during Indian Prime Minister Narendra Modi's visit to the Gulf nation, as announced by the Indian Foreign Ministry. The two nations also signed agreements concerning strategic petroleum reserves and the supply of liquefied petroleum gas (LPG), according to a ministry statement.
Details of the Strategic Defense Partnership
Under the new strategic defense partnership, both sides have agreed to deepen defense industrial collaboration and enhance cooperation in innovation, advanced technology, training, joint exercises, maritime security, cyber defense, secure communications, and information exchange. This partnership marks a significant step in bilateral defense ties.
Energy Cooperation and Market Implications
The UAE's recent decision to leave OPEC is expected to boost its oil output, benefiting importing countries such as India. The ongoing US and Israeli military operations against Iran, now in their third month, have disrupted global energy markets due to the closure of the Strait of Hormuz, a critical chokepoint for approximately 20 percent of the world's oil supply. Iranian strikes have also affected Gulf countries, including the UAE, although a fragile ceasefire was reached last month.
In January, Abu Dhabi and New Delhi signed a $3 billion deal for India to purchase LNG from the UAE, its third-largest trading partner, along with a letter of intent to pursue a strategic defense partnership. During Friday's visit, the Indian government also announced UAE investments worth $5 billion, referencing previous deals such as Emirates NBD's acquisition of a 60 percent stake in RBL Bank for $3 billion last year and Abu Dhabi's IHC $1 billion investment in Sammaan.
