In a further indication of Abu Dhabi’s interest in investing in India, entities under the purview of Sheikh Tahnoon bin Zayed Al Nahyan have initiated preliminary discussions to potentially invest millions of dollars in India.
Abu Dhabi is planning to invest nearly $50 billion in India, which is also its second-largest trading partner. The investment is part of broader growth plans with one of the world’s fastest-growing economies.
Further details regarding the matter are yet to be made public and the provisional pledges could be made during the early months of 2024. The new investments would be based on the meetings of the UAE President Sheikh Mohammed bin Zayed in July with Indian Prime Minister Narendra Modi.
Over the past 10 years, both countries have been looking for trade and investment opportunities and presently they aim to increase the non-bilateral trade to $100 billion. Since becoming the prime minister in 2014, Mr. Narendra Modi has visited the United Arab Emirates five times. Indira Gandhi was the last prime minister before him to visit the United Arab Emirates.
With the investment, a lot of strategic deals are also being discussed between the two nations. The investments may involve sovereign wealth funds, including the Abu Dhabi Investment Authority (ADIA), Mubadala Investment Co., and ADQ. While the details regarding the precise size and timeline of the investments are yet to be finalized, it’s expected that some of these investments could be significant, reflecting the magnitude of this proposed financial commitment.
In a further indication of the UAE’s interest in investing in India, entities under the purview of Sheikh Tahnoon bin Zayed Al Nahyan have initiated preliminary discussions to potentially invest millions of dollars in India. Sheikh Tahnoon, the UAE president’s brother and the chairman of International Holding Co., revealed a 5% stake in Gautam Adani’s flagship conglomerate last month. Although IHC reduced its holdings in two Adani firms shortly after this announcement, the company reiterated its commitment to India.
It is worth noting that the United Arab Emirate’s plans align with its desire to position itself as a neutral and attractive investment destination in a world increasingly divided on geopolitical lines, particularly between China and the United States. With substantial sovereign wealth funds at its disposal, the UAE seeks to forge strong partnerships with countries like India, which is eager to receive foreign investments to support its economic growth.
Other Gulf-backed investors such as Qatar Investment Authority and Saudi Arabia’s Public Investment Fund, have also emerged as prominent investors in India, contributing to the country’s appeal as an investment destination. The UAE’s potential $50 billion investment in India underscores the importance of India’s economic development and its attractiveness to foreign investors.
For the UAE, this partnership is also an opportunity to align itself with a country that’s seeking substantial foreign investments. Prime Minister Narendra Modi’s government has been eager to highlight its economic initiatives as it prepares for federal elections in 2024, and large investments from countries like the UAE can support these efforts.
In a related development earlier this year, the UAE pledged to invest $51 billion in Turkey’s struggling economy, primarily in the energy sector. While some of the discussions related to this investment have faced challenges, this represents another instance of the UAE’s commitment to strengthening its economic ties with nations around the world.
In summary, the United Arab Emirates is exploring the possibility of a substantial investment of up to $50 billion in India, reflecting a deepening partnership between the two countries and the UAE’s strategic approach to investing in one of the world’s most rapidly growing major economies.