India and UAE: Nuclear Energy & Advanced Technology Cooperation

General Studies Paper-2

Context

• India and the United Arab Emirates (UAE) are rapidly expanding their strategic partnership, marking a significant evolution from traditional trade ties to future-focused cooperation in energy, innovation, and sustainability.

About India–UAE Strategic Partnership

• Economic Milestones and Trade Integration:
  • Bilateral Trade: More Than $100 billion (five years ahead of target); India’s third-largest trade partner after China and US.; Largely attributed to the Comprehensive Economic Partnership Agreement (CEPA), including the Virtual Trade Corridor, a key pillar of the India–Middle East–Europe Economic Corridor (IMEEC).
  • Investment Momentum: UAE investments in India have reached $23 billion, with $4.5 billion committed in 2024 alone.
    • The Bilateral Investment Treaty, finalized in 2023, has provided a stable legal framework for this surge in capital flows.
  • Jaywan Card: UAE’s national payment card is built on India’s rupee card stack.
  • UPI-Aani Integration: It aims to enable cross-border digital payments and CBDC interoperability (Scheduled for November 2025).
• Technology and Defense Cooperation
  • Nuclear Energy as a Growth Sector: The UAE currently generates 25% of its electricity from nuclear energy (5.6 GW) and aims to double its capacity by 2030.
  • The Partnership for Accelerating Clean Energy (PACE)—involving the US, UAE, and India—alongside French collaborations, is turning nuclear energy into a cornerstone of clean energy cooperation.
  • India’s participation in the Barakah Nuclear Power Plant — the first multi-unit nuclear facility in the Arab world — underscores the UAE’s confidence in India’s nuclear expertise.
• Defense Engagements: Defense cooperation has risen to the secretary level, including joint military exercises like Desert Cyclone, Desert Flag, and the India-France-UAE Trilateral Exercise.
  • Indian companies are increasingly active in major defense expos such as IDEX and the Dubai Airshow, contributing to projects including Tejas fighter components and drone systems.
• Education, Space, and Critical Minerals
  • Educational Collaborations: These strengthened with the launch of IIT Abu Dhabi’s PhD program, IIM Ahmedabad’s Dubai campus, and IIFT Dubai, further integrating human capital development into bilateral goals.
  • Space: Collaborative efforts are underway in precision medicine and space exploration, leveraging India’s human capital and the UAE’s infrastructure.
  • Critical Minerals: MoU in 2024 to secure global supply chains for lithium, cobalt, and rare earths.
  • Green Hydrogen: Building a transnational value chain, with production targets of 5 MMT (India) and 1.4 MMT (UAE) by 2030.
• Connectivity and Clean Energy Corridors
  • India–Middle East–Europe Economic Corridor (IMEEC) Initiative: It envisions a seamless flow of containers, data, and energy through interconnected grids and subsea cables.
  • I2U2 (India, Israel, UAE, US) Initiative: Plans are advancing for food parks in Gujarat and renewable energy projects targeting 60 GW in Gujarat and Rajasthan.
• Geopolitical Positioning and Africa Outreach
  • Leveraging UAE’s Global CEPA Network: To tap into the UAE’s 25 other CEPAs, enhancing market access and manufacturing potential—especially for energy-intensive sectors.
  • Africa as the Next Frontier: The UAE’s entry into BRICS and initiatives like Bharat Africa Setu offer India a strategic route to expand into African markets, with the UAE serving as a vital gateway.
  • Cultural Symbolism: The BAPS Hindu temple in Abu Dhabi stands as a powerful symbol of religious tolerance and shared values, reinforcing the cultural depth of the India-UAE relationship.

Concerns & Challenges Need To Address

• Geopolitical Sensitivities: India’s balancing act amid Israel-Gaza tensions and UAE’s evolving stance in West Asia presents diplomatic challenges.
• Trade & Economic Concerns: Despite CEPA’s success, trade remains concentrated in a few sectors like gems and petroleum. Diversifying exports into tech, pharma, and renewables is still a work in progress.
• Regulatory Loopholes & Irregularities: A loophole in the India-UAE Economic Partnership Agreement (EPA) allowed traders to import gold disguised as platinum alloy, causing ₹1,700 crore in revenue loss.
• Silver imports from UAE jumped 647x in one year, raising concerns about value-add compliance and misuse of GIFT City’s relaxed regulations.
• Labor Rights & Humanitarian Issues: Migrant Indian workers in the UAE face challenges under the Kafala sponsorship system, including passport confiscation, wage delays, and poor living conditions.
• Strategic & Security Challenges:UAE’s growing ties with China, including defense deals, may complicate India’s strategic calculus in the region.
• UAE’s financial support to Pakistan raises concerns about funds being diverted to anti-India activities.
• Diplomatic & Institutional Gaps: India and UAE lack a dedicated strategic dialogue platform like 2+2 Dialogue to address defense and political issues holistically.
• Indian exporters face hurdles like mandatory Halal certification, affecting processed food exports.

Conclusion

• The evolving India–UAE strategic partnership exemplifies how two complementary economies can build resilient supply chains, drive sustainable development, and pioneer cooperation in nuclear and advanced technologies. With shared visions and coordinated policies, both countries are positioning themselves as global innovation and trade hubs in a rapidly changing world.