India – UAE strategic ties as an example of balanced diplomacy Broadening horizons

On September 9, India and the United Arab Emirates (UAE) signed a memorandum of understanding (MoU) for the supply of liquefied natural gas (LNG) and civil nuclear cooperation. The meetings also included the UAE's participation in India's strategic petroleum reserves and developing and constructing a food park in the Gujarat region. The accords reflect the growing strategic alignment between the two nations. These latest agreements, particularly in energy, demonstrate the expanding scope of collaboration between the two countries, marking a new phase in their bilateral ties as the energy sector has historically underpinned India-UAE relations.

This agreement marks the first of its kind in the nuclear sector between the United Arab Emirates and the Republic of India. It represents a significant step towards strengthening the strategic partnership between the two countries and their efforts to reduce the carbon footprint of the energy sector.

Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed bin Zayed Al Nahyan and Indian Prime Minister Narendra Modi

The biggest surprise in the cooperation agreements reached during the visit has been the inclusion of nuclear energy issues. India has long been eyeing an opportunity to develop its nuclear power field by pushing for the construction of more nuclear power plants as the country looks to increase its supply of cleaner energy. In 2023, the Indian government announced that Haryana state in northern India will be home to a 1,400-MW facility already under construction near Gorakhpur village, about 90 miles northwest of New Delhi. That plant will feature two 700-MW pressurized heavy-water reactors (PHWR) of Indian design.

India is one of the few countries with its own nuclear reactors. Its indigenous-design reactor has a capacity of about 700 megawatts. Given that India has certain technology and experience, it will make the UAE's mission much easier in developing further nuclear technology.

However, the transfer of nuclear technology is not the only crucial part of the UAE-Indian partnership, as the latter is one of the world's biggest oil and gas importers. India is a leading importer of Russian crude oil and gas despite the ongoing Russo-Ukraine war and mounting international pressure. India's oil imports from Russia rose to a record of about 2.1 million barrels per day (bpd) in May 2024 as discounts for Russian oil widened on lower demand from China, while supply from Saudi Arabia dropped to a 10-month low after Saudi Aramco hiked term prices for a second month in May 2024.

Under the new 15-year-long agreement, the UAE will deliver 1 million metric tons of LNG to India annually. The LNG will mainly come from ADNOC's Ruwais LNG project.

The Abu Dhabi National Oil Company (ADNOC) also signed a strategic framework agreement with the Indian Strategic Petroleum Reserves Limited to extend its current oil storage and management agreement and contribute to supporting India’s energy security.

In addition to the gas deal in crude oil, the recent agreement between the giant India Strategic Petroleum Reserve Limited (ISPRL) and ADNOC will make it easier for the UAE government to increase its participation in India's oil storage drive while renewing its existing contracts. Consequently, India holds 5.86 million barrels of Abu Dhabi oil in its strategic reserves in the southern Indian city of Mangalore, though the new agreement will facilitate the UAE’s efforts to expand the current volume of reserves as India remains concerned about energy security amid high oil prices.

For India, the energy partnership with the UAE, particularly in the nuclear power field, is a viable option for paving the way for deeper ties in other fields, such as defence. In this regard, Abu Dhabi’s participation in joint military exercises such as the “Desert Cyclone” in January 2024 is a testament to the growing defence ties. These exercises enhance military cooperation and interoperability, which are vital in maintaining regional stability and security, especially given the shared challenges both countries face in terms of counterterrorism and maritime security.

As such, India will maintain a close alignment with the Gulf region, namely with the UAE, to balance its relations with Russia simultaneously. Although Moscow maintains strategic ties with New Delhi in numerous fields, the UAE has more to offer in this sense as the leading energy and financial hub.