What Happened
- Prime Minister Narendra Modi spoke with UAE President Sheikh Mohamed bin Zayed Al Nahyan on March 17, 2026, as the second telephonic conversation between the two leaders since the outbreak of the US-Israel war on Iran (February 28, 2026).
- Both leaders agreed on the importance of ensuring safe and free navigation through the Strait of Hormuz and committed to working together for the early restoration of peace, security, and stability in the region.
- Modi conveyed Eid greetings to the UAE President and expressed India's strong condemnation of all attacks on the UAE that have resulted in loss of innocent lives and damage to civilian infrastructure.
- The conversation comes as India navigates a complex diplomatic situation: dependent on Hormuz for energy imports, home to approximately 3.5 million Indian workers in the UAE, and maintaining humanitarian engagement with Iran.
- India and the UAE have an active Comprehensive Economic Partnership Agreement (CEPA, since May 2022) and a bilateral trade relationship worth approximately $84 billion annually; the UAE is India's third-largest trading partner and second-largest export destination.
Static Topic Bridges
India-UAE Bilateral Relations: CEPA and Strategic Partnership
India and the UAE signed a Comprehensive Economic Partnership Agreement (CEPA) on February 18, 2022 — the fastest FTA India has ever negotiated (completed in 88 days) — which came into force on May 1, 2022. The agreement is India's first FTA with a Gulf Cooperation Council (GCC) member state and one of the most significant bilateral trade deals of the decade.
- CEPA target: boost India-UAE annual non-oil bilateral trade to $100 billion within 5 years of implementation; trade in services to exceed $15 billion.
- Current trade (2024-25): approximately $84 billion total bilateral trade; UAE is India's third-largest trading partner and second-largest export destination.
- UAE's role in Indian economy: accounts for approximately 8% of India's crude oil imports; major LNG supplier; home to approximately 3.5 million Indian expatriates; bilateral investment flows exceed $20 billion.
- CEPA covers: 80%+ of India's exports to UAE at zero duty; services in IT, healthcare, finance; professional mobility provisions.
- Defence cooperation: India-UAE signed a Comprehensive Strategic Partnership in 2017; inaugural joint military exercise "Desert Eagle" series; cooperation on maritime security in the Arabian Sea.
- UAE is a key node for Indian diaspora remittances: the UAE-India remittance corridor is one of the world's largest, with over $18-20 billion flowing annually.
Connection to this news: The Modi-UAE call is not merely diplomatic courtesy — it is a direct exercise in protecting the economic architecture underpinning $84 billion in bilateral trade, 3.5 million diaspora workers, and India's energy supply. The Hormuz context makes this a high-stakes conversation.
Strait of Hormuz and India's Energy Security Calculus
India's dependence on West Asian energy is structural: the Gulf supplies approximately 60-65% of India's crude oil imports, and virtually all of it transits the Strait of Hormuz. A sustained Hormuz closure would simultaneously spike crude oil prices, damage the rupee through trade deficit widening, and threaten fuel supply to Indian industry.
- India's oil import bill: approximately $130-140 billion annually (at $80-85/barrel); among the largest drivers of India's current account deficit.
- Hormuz-dependent suppliers to India: Iraq (~22%), Saudi Arabia (~17%), UAE (~8%), Kuwait (~7%), Qatar (LNG) — together approximately 55-60% of India's crude imports.
- Russia emerged as a major supplier post-2022 sanctions; Russia's share rose to ~18% of India's imports — but Russian exports transit the Indian Ocean, not Hormuz.
- India's Strategic Petroleum Reserves (SPR) at Visakhapatnam, Mangaluru, and Padur: combined capacity of approximately 5.33 million metric tonnes (~39 million barrels) — roughly 9.5 days of consumption.
- Every $10/barrel increase in oil price widens India's current account deficit by approximately $15-17 billion annually and can depreciate the rupee by 2-4%.
- India has requested Iran to allow Indian-flagged vessels and India-bound tankers through Hormuz; Iran has selectively allowed some passage.
Connection to this news: Modi's agreement with the UAE on Hormuz navigation safety is partly a bilateral diplomatic initiative but also a signal to Iran (with which India has separate bilateral channels) that India seeks and expects continued access for its energy imports. The UAE, as a major Hormuz stakeholder, amplifies this signal.
India's Role in West Asian Diplomacy: Balance Between Iran, Israel, and Gulf States
India has cultivated a distinctive diplomatic posture in West Asia — maintaining active, deep relationships simultaneously with Iran, Israel, the Gulf Arab states (UAE, Saudi Arabia, Qatar, Oman), and the United States, without formally aligning with any side. This "omni-directional" approach has become increasingly stressed by the 2026 conflict.
- India-Israel: deepened strategic ties since the 1990s; Israel is India's second-largest arms supplier (after Russia) and a key partner in defence technology, agriculture, water management, and counter-terrorism.
- India-Iran: historical civilisational ties; Chabahar Port (India-developed, operational since 2024) as India's gateway to Afghanistan and Central Asia bypassing Pakistan; energy imports.
- India-Gulf Arab states: GCC collectively is India's largest trading partner and top source of remittances; India-Saudi Arabia bilateral trade ~$43 billion; India-Qatar LNG dependency.
- I2U2 Group (India, Israel, UAE, USA): established June 2022, focuses on infrastructure, energy, transport, space, health, water, and food security — an "economic NATO" of sorts that signals India-Israel-UAE alignment.
- India's West Asia policy is guided by a "multi-alignment" doctrine: engage all parties, avoid military entanglement, protect economic interests, and leverage diaspora relationships.
Connection to this news: The Modi-UAE call is the third leg of India's diplomatic triangle in this crisis (after maintaining ties with Iran and before any outreach to Israel/US). It illustrates multi-alignment as active diplomacy rather than mere passive non-alignment.
Gulf Cooperation Council (GCC) and India's Institutional Engagement
The Gulf Cooperation Council (GCC), established in May 1981, is a regional intergovernmental organisation of six Arab states: Saudi Arabia, UAE, Kuwait, Qatar, Bahrain, and Oman. India has been pursuing an FTA with the GCC as a bloc (in addition to the bilateral UAE CEPA) and has significant institutional engagement with the grouping.
- GCC was established on May 25, 1981, in Abu Dhabi; headquarters in Riyadh, Saudi Arabia. Members: Saudi Arabia, UAE, Kuwait, Qatar, Bahrain, Oman.
- Collective GDP: approximately $2 trillion (2024); together the GCC represents India's largest trading partner as a bloc (~$180 billion in 2023-24).
- India-GCC FTA: negotiations resumed in 2022 after a decade-long pause; the bilateral UAE CEPA was partly aimed at providing a template for the broader GCC deal.
- India-GCC Senior Officials' Meeting (SOM) and India-GCC Dialogue on Trade, Investment and Energy are the key institutional mechanisms.
- GCC countries collectively hold India's largest diaspora: approximately 8.9 million Indians, generating approximately $40-45 billion in annual remittances.
- The UAE hosts the largest single concentration: approximately 3.5 million Indians — the largest expatriate community in any single country.
Connection to this news: India's engagement with the UAE on Hormuz is also, implicitly, engagement with the GCC as a collective — as the UAE's position as a GCC member gives any India-UAE diplomatic outcome a regional multiplier effect. What India and the UAE agree on safe navigation effectively signals to all GCC members India's stance.
Key Facts & Data
- India-UAE CEPA: signed February 18, 2022; in force May 1, 2022 — negotiated in 88 days (record speed)
- Bilateral trade: ~$84 billion (2024-25); UAE = India's 3rd-largest trading partner
- Indian diaspora in UAE: ~3.5 million (largest single-country Indian diaspora)
- UAE-India remittances: ~$18-20 billion annually
- India's crude oil import dependence: ~85%; Gulf suppliers (Hormuz-transiting) ~55-60% of total
- India's SPR: ~39 million barrels (~9.5 days cover)
- Modi-UAE call: second such call since war began February 28, 2026
- I2U2 Group: India, Israel, UAE, USA — established June 2022
- GCC established: May 25, 1981, Abu Dhabi; HQ Riyadh; 6 member states
- India-GCC collective trade: ~$180 billion (2023-24); Indian diaspora in GCC: ~8.9 million