The UAE is reportedly considering investing $50 billion in India recognising India’s rising economic potential. According to Bloomberg, the announcements by the UAE about these investments could be made next year. Indian Prime Minister Narendra Modi’s wide-ranging geopolitical and geo-economic outreach appears to be yielding results.

The new set of investments could be the result of his meetings with the UAE President, His Highness Sheikh Mohammed bin Zayed Al Nahyan. Modi’s visit to the UAE in July this year marked his fifth trip to the nation since he took office in 2014. The announcements by the UAE could coincide with the general elections of 2024 in which Modi is set to seek a third term in office and could boost his image in the elections.
According to Bloomberg, the deals being discussed include stakes in key Indian infrastructure projects and state-owned assets. Some of the investments could involve sovereign wealth funds such as the Abu Dhabi Investment Authority, Mubadala and ADQ.

India is a prized economy as far as the UAE is concerned. A rising Indian middle class and the UAE’s aim to diversify from investment destinations such as Europe have only strengthened this view. The UAE’s plan is also an indicator of the government’s aim to position itself as a country that does not take sides in a world increasingly split between Washington and Beijing. State-backed investors in the Gulf region have boosted ties with the world’s fifth biggest economy due to India’s attractiveness. Others including the Qatar Investment Authority and Saudi Arabia’s Public Investment Fund have also emerged as prominent investors in the country.

The UAE, a country that manages close to $1.5 trillion in sovereign wealth, is a vital ally to the world’s most populous nation seeking to bridge infrastructure gaps. Politically, any large foreign investments would help Modi highlight his efforts to bolster the economy ahead of the 2024 elections.

India and the UAE share strong ties on all fronts. A total of 2.8 million Indian citizens live in the UAE. The UAE emerged as the fourth largest investor in India during 2022-23, compared to the seventh in 2021-22. A comprehensive free trade agreement between the two countries since May 2022, allows a number of goods from both countries to get zero-duty access to each other’s markets, besides eased norms for promoting investments. New Delhi and Abu Dhabi now aim to increase the non-oil bilateral trade to $100 billion.