The Corridor Takes Shape
The Abu Dhabi-India relationship has undergone a structural transformation over the past decade. What was historically a labour migration and hydrocarbon trade relationship has evolved into a multi-dimensional strategic partnership spanning trade agreements, multilateral frameworks, energy security, sovereign wealth investment, technology cooperation, and alternative payment mechanisms. India is now embedded in Abu Dhabi’s economic strategy not as a peripheral market but as a central pillar — and Abu Dhabi occupies a reciprocally important position in India’s Gulf and Middle East engagement.
The speed of this transformation reflects the personal relationship between Sheikh Mohamed bin Zayed and Prime Minister Narendra Modi, but it is sustained by structural economic complementarities that transcend any individual leadership dynamic. India needs energy security, capital for infrastructure, and access to Middle Eastern and African markets. Abu Dhabi needs diversified investment returns, access to the world’s fastest-growing large economy, and a strategic hedge against over-dependence on any single great power relationship. The alignment of interests is genuine, and its economic consequences are measurable.
The CEPA Trade Framework
The India-UAE Comprehensive Economic Partnership Agreement (CEPA), which entered into force in May 2022, represents the institutional foundation of the trade relationship. CEPA eliminated or reduced tariffs on approximately 80 percent of product lines, created preferential market access for Indian goods entering the UAE and Emirati goods entering India, and established frameworks for services trade, digital commerce, and investment facilitation.
The agreement’s impact on bilateral trade has been substantial. Trade flows between India and the UAE were already among the largest for both countries, and the preferential tariff treatment has accelerated growth in specific sectors — particularly precious metals and jewellery, textiles, agriculture, and petroleum products. India’s gem and jewellery sector, which uses the UAE as a processing and re-export hub, has been a primary beneficiary.
For Abu Dhabi specifically, CEPA provides the legal infrastructure for deeper commercial integration with a market of 1.4 billion consumers. The agreement facilitates the export of Abu Dhabi-produced petrochemicals, aluminium, and processed goods to India under preferential terms, while creating a framework for Indian companies to establish operations in Abu Dhabi’s industrial zones as export platforms serving both the Indian and wider Asian markets.
The services trade provisions are equally significant. CEPA includes commitments on financial services, professional services, and telecommunications that create opportunities for Abu Dhabi’s financial centre, ADGM, to serve as a gateway for Indian companies accessing Middle Eastern capital markets — and for Indian technology and professional services firms to establish Abu Dhabi operations serving the Gulf region.
I2U2: The Quadrilateral Framework
The I2U2 grouping — India, Israel, the UAE, and the United States — represents one of the most consequential minilateral frameworks to emerge from the Abraham Accords period. Formally announced in 2022, I2U2 brings together four countries with complementary capabilities: American technology and capital markets, Israeli innovation and agricultural technology, Emirati capital and logistics infrastructure, and Indian scale and manufacturing capacity.
The framework’s initial focus areas — food security, energy, water, and transportation — align directly with Abu Dhabi’s economic diversification objectives. Joint initiatives include investments in integrated food parks in India, renewable energy projects, and technology cooperation that leverages each member’s comparative advantages.
For Abu Dhabi, I2U2 provides an institutional mechanism for channelling sovereign wealth investment into India alongside American and Israeli partners, reducing execution risk and providing diplomatic scaffolding for commercially motivated investments. The multilateral format also provides political cover for the Israel-UAE-India cooperation that might otherwise attract criticism in domestic or regional constituencies.
The framework’s strategic significance extends beyond its specific projects. I2U2 creates a coalition of countries with a shared interest in an open, connected Indo-Pacific and Middle East economic architecture — an architecture that provides alternatives to Chinese-dominated connectivity initiatives without explicitly framing itself in anti-China terms. For Abu Dhabi, which maintains productive relationships with Beijing, this positioning is essential.
ADNOC and Indian Energy Security
ADNOC’s involvement in India’s strategic petroleum reserve programme represents one of the most tangible manifestations of the energy security dimension. ADNOC has stored crude oil in India’s underground strategic reserves at Mangalore, providing India with immediate access to emergency supplies while giving ADNOC a pre-positioned inventory serving one of its largest customers.
The arrangement serves both parties’ strategic interests. India gains physical oil security — crude stored on Indian soil that can be released rapidly in a supply disruption. ADNOC gains a logistics advantage, a commercial relationship that extends beyond spot sales, and a visible commitment to India’s energy security that deepens the strategic partnership. The crude stored in India remains ADNOC’s property until drawn upon, creating an inventory position that can be commercially managed while serving strategic objectives.
Beyond the strategic reserve, ADNOC’s broader engagement with India encompasses crude oil supply contracts, LNG supply discussions, and investment in Indian downstream assets. India is one of the largest importers of Abu Dhabi crude, and the supply relationship provides ADNOC with a growing, structurally energy-deficit market that will require increasing imports for decades.
India’s energy transition creates additional opportunities. ADNOC’s investments in hydrogen, carbon capture, and lower-carbon energy production position the company to supply India with cleaner energy products as Indian climate commitments drive fuel mix changes. The energy relationship is evolving from a hydrocarbon-only trade to a broader energy partnership encompassing natural gas, hydrogen, renewables, and the technologies that connect them.
Sovereign Wealth Investment in India
Abu Dhabi’s sovereign wealth funds have committed more than $50 billion to Indian investments across multiple asset classes, making India one of the largest country exposures in the combined portfolios of ADIA, Mubadala, and ADQ. The scale of this commitment reflects a deliberate strategic allocation to what Abu Dhabi’s investment planners regard as the most attractive long-term growth opportunity among major economies.
ADIA’s India portfolio spans listed equities, real estate, infrastructure, and private credit. The fund has invested in Indian real estate development, renewable energy assets, and infrastructure projects including roads, ports, and data centres. These investments provide exposure to India’s urbanisation, infrastructure buildout, and digital transformation — secular trends that ADIA’s investment horizon of decades is designed to capture.
Mubadala’s India investments are more concentrated in technology and financial services. The fund has backed Indian technology companies through its venture capital arm, invested in Indian financial infrastructure, and participated in large-scale transactions in the telecommunications and retail sectors. Mubadala’s investments in Reliance Industries’ digital and retail platforms represent a bet on the digitisation of India’s consumer economy.
ADQ has focused on infrastructure, agriculture, and healthcare — sectors aligned with its mandate to build strategic portfolios in essential industries. ADQ’s Indian investments in food logistics, pharmaceutical distribution, and healthcare infrastructure create operational platforms that serve both commercial objectives and the bilateral relationship’s food and health security dimensions.
The cumulative scale of Abu Dhabi sovereign wealth investment in India creates a constituency for the bilateral relationship within Abu Dhabi’s investment establishment. When ADIA, Mubadala, and ADQ collectively have tens of billions deployed in Indian assets, the financial success of those investments becomes a shared interest that reinforces diplomatic and strategic cooperation.
The Indian Diaspora
Abu Dhabi’s Indian diaspora, estimated at more than 500,000 people in the emirate and over 3.4 million in the UAE as a whole, constitutes the largest expatriate community and plays an essential role in the emirate’s economy. Indian professionals, labourers, entrepreneurs, and their families occupy positions across the income spectrum — from construction workers and service staff to senior executives, physicians, engineers, and business owners.
The diaspora’s economic contribution is multifaceted. Indian professionals provide essential human capital for Abu Dhabi’s healthcare system, technology sector, financial services industry, and education sector. Indian entrepreneurs operate businesses ranging from small trading firms to substantial conglomerates. Indian remittances from the UAE to India represent one of the largest bilateral remittance corridors in the world.
The diaspora also functions as a commercial bridge. Indian business networks in Abu Dhabi facilitate trade, investment, and business development between the two economies. Indian professionals in Abu Dhabi’s financial, legal, and consulting sectors provide the knowledge base for bilateral transactions. The human infrastructure of the relationship — people who understand both economies, both regulatory environments, and both business cultures — is as important as the institutional frameworks.
Abu Dhabi’s treatment of its Indian diaspora is a matter of diplomatic significance. Labour rights, visa policies, healthcare access, and cultural accommodation for Indian workers and residents are recurring agenda items in bilateral discussions. India’s growing economic and strategic importance has given New Delhi greater leverage to advocate for its citizens abroad — and Abu Dhabi has responded with reforms to labour protections, visa categories, and residency options that benefit the Indian community.
The IMEC Corridor
The India-Middle East-Europe Economic Corridor (IMEC), announced at the G20 summit in 2023, represents perhaps the most ambitious infrastructure concept in the bilateral relationship. IMEC envisions an integrated transport and digital connectivity corridor linking India to Europe through the Gulf, combining rail, port, and data infrastructure into a multimodal route that provides an alternative to traditional maritime shipping and Chinese Belt and Road corridors.
Abu Dhabi’s position in the IMEC framework is pivotal. The corridor’s Gulf segment would transit through the UAE, leveraging Abu Dhabi’s port infrastructure, logistics capabilities, and geographic position as a transhipment and processing node between the Indian subcontinent and the Mediterranean. IMEC would channel Indian goods through Abu Dhabi’s ports and logistics zones, generating trade facilitation revenue and reinforcing the emirate’s position as a global logistics hub.
The corridor’s realisation faces significant obstacles — political, financial, and logistical. The route transits through multiple countries with varying political stability and infrastructure quality. The capital requirements are enormous. Regional conflicts, particularly the instability in the Eastern Mediterranean and Red Sea, create security risks for the corridor’s western segments. IMEC remains more concept than construction at this stage.
Nevertheless, the corridor represents a strategic vision that aligns Abu Dhabi and India in a shared infrastructure project with decades-long implications. Even partial realisation of IMEC would deepen the economic integration between Abu Dhabi and India, create new trade flows, and provide both countries with logistics alternatives that reduce dependence on any single route or chokepoint.
The Modi-MBZ Relationship
The personal relationship between Sheikh Mohamed bin Zayed and Prime Minister Narendra Modi has been a catalyst for the partnership’s acceleration. Multiple state visits, the conferral of Abu Dhabi’s highest civilian honour on Modi, and regular bilateral communication have created a leadership dynamic that enables rapid decision-making and elevated political commitment to joint initiatives.
Personal diplomacy matters in both systems. Abu Dhabi’s governance model concentrates decision-making authority in the ruling family, enabling the leadership to commit to partnerships and deploy sovereign wealth capital with minimal institutional friction. India’s executive-driven foreign policy under Modi has similarly concentrated strategic direction in the Prime Minister’s Office, facilitating rapid agreement on bilateral frameworks that might otherwise take years to negotiate through bureaucratic channels.
The risk in personality-driven partnerships is succession and political change. A change in Indian political leadership could alter the priority assigned to the Gulf relationship. A transition in Abu Dhabi’s leadership — though the current succession framework appears stable — could shift strategic emphasis. The institutional frameworks being built — CEPA, I2U2, IMEC, investment partnerships — are designed to outlast any particular leadership configuration, but their energy and momentum depend significantly on sustained executive commitment.
Rupee-Dirham Trade Settlement
The development of rupee-dirham trade settlement mechanisms represents a significant step toward de-dollarisation of bilateral trade flows. India and the UAE have established frameworks for conducting bilateral trade in their respective currencies, reducing dependence on the US dollar as an intermediary currency and lowering transaction costs for bilateral commerce.
The motivation is primarily commercial rather than geopolitical. Dollar-denominated trade requires both parties to maintain dollar liquidity, pay foreign exchange conversion costs, and accept exposure to US monetary policy and sanctions risk. Direct rupee-dirham settlement eliminates one conversion step, reduces costs, and provides a measure of insulation from dollar liquidity conditions.
However, the geopolitical implications are not negligible. The development of non-dollar trade settlement infrastructure — even between close US partners — contributes to the gradual diversification of the global payments system. For Abu Dhabi, which maintains a dollar-pegged currency, the development of alternative settlement channels provides optionality without challenging the fundamental dollar peg that anchors the dirham.
Implications for Vision 2030
India is integral to Abu Dhabi’s economic vision across multiple dimensions. Indian energy demand sustains hydrocarbon revenue. Indian investment destinations provide sovereign wealth diversification returns. Indian talent staffs Abu Dhabi’s economy. Indian trade flows transit Abu Dhabi’s logistics infrastructure. The CEPA framework facilitates bilateral commerce. The I2U2 and IMEC frameworks embed Abu Dhabi in multilateral connectivity architecture.
The relationship’s trajectory is toward deeper integration. India’s economic growth — projected to make it the world’s third-largest economy within the decade — will increase the importance of every dimension of the bilateral relationship. Abu Dhabi’s challenge is to ensure that it captures a disproportionate share of the economic benefits of India’s rise, rather than allowing them to flow to competing Gulf centres.
The strategic corridor between Abu Dhabi and India is no longer prospective. It is operational, expanding, and increasingly consequential for both economies. Its management — maintaining investment returns, deepening trade integration, protecting diaspora welfare, and advancing infrastructure connectivity — is among the most important geopolitical tasks facing Abu Dhabi’s economic planners as they execute Vision 2030.