India signs $3 billion LNG agreement with UAE, vows to double trade, as U.S. deal remains elusive

India said it plans to double bilateral trade with the UAE to $200 billion by 2032, in a step toward diversifying its partnerships as a deal with the Asian country’s biggest trading partner, the U.S., remains elusive.

In a whirlwind, three-hour long meeting late Monday between UAE’s President Sheikh Mohamed bin Zayed Al Nahyan and Indian Prime Minister Narendra Modi in New Delhi, both countries’ state-owned companies signed a 10-year liquefied natural gas supply agreement.

Under the deal, the Abu Dhabi National Oil Company, which is owned by the Abu Dhabi government, will supply LNG worth up to $3 billion for a period of 10 years, starting 2028, to India’s state-owned Hindustan Petroleum Corporation.

With this deal, India is now UAE’s largest customer of LNG and will account for 20% of sales by 2029, ADNOC said in a release.

Both countries also discussed “a wide range of issues aimed at further strengthening the multifaceted India-UAE friendship,” Prime Minister Modi said in a post on X.

“It was a productive visit in terms of outcome,” said Harsh Pant, vice president for studies and foreign policy at New Delhi-based think tank Observer Research Foundation told CNBC’s Inside India.

He added that India-UAE ties have evolved to a point where “regular high-level interaction at relatively short notice is going to become more common”.

Trade between India and UAE touched $100 billion in fiscal year 2025. Both countries signed the Comprehensive Economic Partnership Agreement in 2022.

India is the Middle Eastern country’s second-largest trading partner, accounting for nearly 9% of its total trade and 14% of non-oil exports as of September 2025, according to India Brand Equity Foundation, an initiative backed by the commerce ministry.

UAE was India’s third largest trading partner after the U.S. and China in fiscal year 2025, and is home to 3.5 million Indian expatriates.

Diversifying allies

India’s plan to expand its trade with UAE comes at a time when the country’s exports to the U.S. are under pressure owing to the 50% tariff imposed by Washington on Indian goods since August last year.

“Even with a trade deal [with the U.S.] there is no guarantee that President Trump’s “unpredictability would end,” said Pant, adding that it is the reason that India has been reaching out to finalise trade deal with other countries.

Last year, following the U.S. tariffs, India entered trade pacts with the UK and Oman, and said it will sign a deal with New Zealand in the first half of 2026.