PM Modi in UAE: India signs defence, gas supply and strategic oil reserves pacts with Abu Dhabi

During a bilateral visit to Abu Dhabi, a series of landmark agreements were signed between India and the UAE spanning defence cooperation, energy security, a...

What Happened

During a bilateral visit to Abu Dhabi, a series of landmark agreements were signed between India and the UAE spanning defence cooperation, energy security, and infrastructure investment.
In the energy domain, a strategic collaboration agreement was signed between India's strategic petroleum reserves authority and Abu Dhabi's national oil company (ADNOC), expanding UAE participation in India's strategic petroleum reserves to up to 30 million barrels.
The pact also explores storage of Indian strategic reserves in the UAE's Fujairah facility, creating a reciprocal energy security architecture.
A separate agreement covers long-term LPG supply and expanded trading opportunities between ADNOC and Indian Oil Corporation (IOC).
In the defence sector, a framework agreement on strategic defence partnership was concluded, covering maritime security, cyber defence, joint exercises, military training, and secure communications.
Abu Dhabi pledged USD 5 billion in investment directed at Indian infrastructure and financial institutions.
The visit occurred against the backdrop of heightened oil price volatility driven by the West Asia conflict and Strait of Hormuz disruptions.

Static Topic Bridges

India's Strategic Petroleum Reserves (SPR) Programme

India established its Strategic Petroleum Reserve (SPR) programme to insulate its economy against supply disruptions and oil price shocks. The programme is managed by Indian Strategic Petroleum Reserves Limited (ISPRL), a Special Purpose Vehicle under the Ministry of Petroleum and Natural Gas.

Three operational underground rock cavern facilities: Visakhapatnam (1.33 MMT), Mangaluru (1.5 MMT), and Padur in Udupi, Karnataka (2.5 MMT) — total capacity 5.33 MMT (approximately 39 million barrels).
Two additional Phase II facilities approved in 2021: Chandikhol, Odisha (4 MMT) and Padur extension (2.5 MMT) — under PPP mode.
India's overall crude reserve (commercial + strategic) is approximately 74 days of consumption as of 2026.
Current SPR fill level: approximately 64% of total storage capacity (as of early 2026).
India imports approximately 85% of its crude oil requirement — the strategic reserve is a critical buffer against supply shocks.
The UAE (ADNOC) already participates in India's SPR programme with crude stored at Mangaluru; this agreement expands that to 30 million barrels.

Connection to this news: Expanding ADNOC's crude storage in India to 30 million barrels simultaneously serves India's energy security (pre-positioned emergency supply) and commercial interests (ADNOC retains the right to sell this crude in Asian markets, incentivising participation).

India-UAE Comprehensive Economic Partnership Agreement (CEPA)

The India-UAE CEPA is a bilateral trade agreement signed on 18 February 2022, which came into force on 1 May 2022. Negotiated in just 88 days, it is notable for being India's first CEPA with a Gulf Cooperation Council (GCC) member state.

UAE eliminated duties on 97.4% of its tariff lines corresponding to 99% of imports from India.
India eliminated duties immediately on over 80% of tariff lines covering 90% of Indian exports by value.
Target: bilateral trade in goods exceeding USD 100 billion and services exceeding USD 15 billion within five years.
Actual performance: bilateral merchandise trade crossed USD 100 billion in FY2024-25 (nearly doubling from USD 43.3 billion in FY2020-21).
UAE is India's third-largest trading partner and second-largest export destination.
UAE hosts approximately 3.5 million Indian expatriates — the largest Indian diaspora community in any single country.

Connection to this news: The 2026 defence and energy pacts deepen the relationship beyond trade into strategic partnership — building on the CEPA foundation. The USD 5 billion investment pledge reinforces UAE's role as a major source of capital for Indian infrastructure.

India-UAE Defence Cooperation Framework

India-UAE defence cooperation has evolved from a nascent relationship to a strategic tier following the designation of a Comprehensive Strategic Partnership in 2017. Key elements include joint naval exercises, defence equipment transfers, and now a formal strategic defence partnership framework.

Joint military exercise: "Desert Eagle" (air exercise); "Gulf Star" (naval cooperation).
India's defence exports to UAE include ammunition, military stores, and components.
Cyber defence and secure communications clauses in the 2026 framework reflect the growing importance of non-kinetic domains in defence partnership.
Maritime security cooperation is particularly significant given UAE's strategic location at the mouth of the Persian Gulf, adjacent to the Strait of Hormuz.
The framework covers defence industrial collaboration — an upgrade from equipment purchase toward co-development and co-production.

Connection to this news: The 2026 defence framework agreement elevates the relationship to a more structured, institutionalised defence industrial partnership — moving beyond exercises and training to technology and manufacturing cooperation.

Energy Security: LNG and LPG Supply Agreements

Long-term supply agreements (LTSAs) for liquefied petroleum gas (LPG) and liquefied natural gas (LNG) are bilateral commercial instruments that reduce energy import risk by locking in volumes and pricing formulae. They are distinct from spot market purchases.

LPG: primarily propane and butane; used in India predominantly as cooking fuel (LPG cylinders) and as feedstock for petrochemicals.
LNG: chilled natural gas (-162°C); India is a major LNG importer; used for power generation and industrial processes.
ADNOC is one of the world's largest oil and gas companies; its LNG is produced at Das Island and exported globally.
Indian Oil Corporation (IOC) is India's largest state-owned downstream oil company; it is a key buyer for the domestic distribution network.
Long-term LPG supply agreements from the UAE reduce India's dependence on spot market LPG purchases (often from Middle East and US), providing price predictability.

Connection to this news: The LPG supply agreement between ADNOC and IOC formalises what has been a largely spot-market relationship, providing India with supply security and ADNOC with a guaranteed large-volume Asian buyer.

Key Facts & Data

ISPRL total SPR capacity: 5.33 MMT (approximately 39 million barrels) across 3 locations.
ADNOC SPR participation expansion: up to 30 million barrels of crude in Indian storage facilities.
Fujairah (UAE): a major oil storage and bunkering hub on the Gulf of Oman, outside the Strait of Hormuz — making it a strategic alternative storage point.
UAE investment pledge: USD 5 billion in Indian infrastructure and financial institutions.
India-UAE CEPA: signed February 18, 2022; in force May 1, 2022; negotiated in 88 days.
Bilateral merchandise trade: crossed USD 100 billion in FY2024-25.
UAE hosts approximately 3.5 million Indian diaspora — largest in any single country.
India imports approximately 85% of its crude oil requirement; any supply disruption has immediate macroeconomic consequences.
India's overall oil reserves (commercial + strategic): approximately 74 days of consumption.