NEW DELHI: Prime Minister Narendra Modi’s brief stopover in Abu Dhabi on Friday saw India and the United Arab Emirates (UAE) sign six agreements aimed at deepening energy and defence ties. The UAE also announced its entities would invest $5 billion in India.
The PM’s visit coincided with the UAE announcing plans to double its crude oil export capacity by building an additional pipeline to the Port of Fujairah by 2027, with the objective of bypassing the Strait of Hormuz amid rising regional tensions. This will allow more vessels, including Indian ships and those chartered by Indian firms, to load crude oil and liquefied petroleum gas (LPG) shipments from the Fujairah oil terminal. The existing 406-km pipeline connects Abu Dhabi’s oil fields to the Habshan terminal and onwards to Fujairah, bypassing Hormuz.
However, the pipeline has the capacity to transfer only 1.5-1.8 million barrels of oil per day.
The UAE’s crude oil production capacity stands at 4.85 million barrels per day, though actual production is around 3.4 million barrels per day. The country intends to raise output following its exit from the Organisation of Petroleum Exporting Countries (Opec) and Opec+. India consumes around 5.5 million barrels of oil daily.
During the visit, India and the UAE also signed a framework agreement on a strategic defence partnership, under which the two sides agreed to deepen defence industrial collaboration and cooperation in innovation and advanced technology, training, military exercises, and maritime security.
The $5 billion investment commitments by UAE entities include $3 billion by Emirates New Development Bank (ENDB) in RBL Bank, $1 billion by Abu Dhabi Investment Authority (ADIA) with the National Infrastructure & Investment Fund (NIIF) for priority infrastructure projects in India, and another $1 billion by International Holding Company in Sammaan Capital.
Modi left for the Netherlands, the first leg of his four-nation European tour, after concluding what he described as “a short but highly productive visit to the UAE”. UAE President Sheikh Mohamed bin Zayed Al Nahyan received him at the airport.
During their discussions, Modi reaffirmed India’s strong condemnation of attacks on the UAE and expressed solidarity with its leadership and people. He reiterated India’s support for safe transit passage and unimpeded navigation through the Strait of Hormuz, which is vital for regional peace and stability as well as global energy and food security.
The UAE also condemned the strike on an Indian-flagged commercial vessel off the coast of Oman, describing it as a “terrorist attack” and a “dangerous escalation” that threatens the stability of critical waterways. The vessel, sailing from Somalia, came under attack on Wednesday. All 14 crew members were rescued by Omani authorities. Neither India nor the UAE identified the perpetrators. India had termed the strike “unacceptable” on Thursday.
The six agreements between the two countries included a strategic collaboration pact between Indian Strategic Petroleum Reserves Limited (ISPRL) and Abu Dhabi National Oil Company (ADNOC). Under the agreement, ADNOC may store up to 30 million barrels of crude oil in India’s strategic petroleum reserves, including through participation in facilities at Visakhapatnam in Andhra Pradesh and development of reserve sites at Chandikhol in Odisha.
Potential storage of crude oil in Fujairah, UAE, is to form part of the Indian strategic petroleum reserve, a press release said.
The two countries also signed an agreement for potential collaboration in liquefied natural gas (LNG) and LPG storage facilities in India.
Another agreement between Indian Oil Corporation Limited (IOCL) and ADNOC related to LPG supplies, exploring opportunities for long-term sale and purchase arrangements between ADNOC Gas and IOCL.
In the shipping sector, agreements included a pact between Cochin Shipyard Limited (CSL) and Drydocks World (DDW) to establish a ship repair cluster at Vadinar in Gujarat, including offshore fabrication facilities under India’s Maritime Development Fund Scheme. An agreement to set up a computer cluster as part of AI Mission India was also signed.
In a special gesture, a formation of F-16 fighter aircraft from the UAE escorted the PM’s plane when it entered the Gulf country’s airspace on Friday. “The way your air force escorted me today is an honour for the people of India. For quite some time, we had been speaking over the phone, but I was eager to meet you personally. I am very happy to meet you today,” Modi told the UAE President during their meeting.
The PM also said India was ready to extend all possible support for peace in West Asia. Modi spent around two and a half hours in the UAE. On January 19, the UAE President visited India, where the PM received him at the airport. The visit lasted a little over three hours.
The UAE hosts a prominent US military base, which has been at the receiving end of Iranian strikes during the US-Israeli war on Iran that started on February 28. “The way UAE has been targeted is not acceptable,” but “the way UAE has handled the current situation with restraint is praiseworthy,” the PM said. He thanked the UAE leadership for their country maintaining its role as an important partner in India’s energy security.
The two leaders welcomed the operationalisation of the Virtual Trade Corridor using MAITRI (Master Application for International Trade and Regulatory Interface). The digital framework, linking Customs and port authorities in both countries, is expected to streamline cargo movement, reduce logistics costs and transit time, and improve trade flows.
Source: Business Standard
