This article covers the history of trade between India and the UAE, trade values, the main goods traded, UAE investment in India and local currency settlement. It is based on the MEA brief of April 2026, and the figures are given as of that brief.
Historical trade links
According to the MEA brief of April 2026, India and the UAE have shared trade links through the centuries. That trade was dominated by traditional items such as dates, pearls and fishes, and it underwent a sharp change after the discovery of oil in the UAE; oil exports began from Abu Dhabi in 1962.
With the emergence of the UAE as a unified entity in 1971, exports from India started growing gradually over the years. The brief states that the real impetus came after Dubai positioned itself as a regional trading hub by the early 1990s, at about the time the economic liberalisation process started in India.
Trade value
India-UAE trade was valued at US$ 180 million per annum in the 1970s. The brief states that it reached US$ 100 billion in 2025, making the UAE India's third largest trading partner after China and the US.
The UAE is also the second largest export destination of India, after the US, with exports of nearly US$ 36 billion for the year 2023-24. According to the brief, both sides are striving to further strengthen economic and commercial ties, and the growth of these relations contributes to the stability and strength of what it calls a rapidly diversifying and deepening strategic partnership between the two countries.
Main items traded
The brief describes India's exports to the UAE as well diversified. India's major export items to the UAE are:
- petroleum products
- precious metals, stones, gems and jewellery
- minerals
- food items, including cereals, sugar, fruits and vegetables, tea, meat and seafood
- textiles, including garments, apparel, synthetic fibre, cotton and yarn
- engineering and machinery products
- chemicals
India's major import items from the UAE are petroleum and petroleum products; precious metals, stones, gems and jewellery; minerals; chemicals; and wood and wood products. The UAE is the 4th largest source of crude oil and the 2nd largest source of LNG and LPG for India.
UAE investment in India
The UAE's cumulative foreign direct investment into India from April 2000-2025 is US$ 22.85 billion. In 2024-25 the UAE ranked 5th largest, with FDI of $4.3 billion into India. Overall, the brief states, the UAE is the 7th biggest FDI investor for India, and it was the 6th largest in 2023-24.
UAE investments in India are concentrated mainly in five sectors: Construction (Infrastructure) Activities, Computer Software & Hardware, the Services Sector, Power, and Trading. The UAE has committed to invest US$ 75 billion in India's infrastructure sector over a period of time.
The Abu Dhabi Investment Authority (ADIA), which the brief describes as the principal Sovereign Wealth Fund of the UAE and one of the world's largest, is an anchor investor in the NIIF Master Fund, through an investment of US$ 1 billion in the National Infrastructure Investment Fund (NIIF).
Local currency settlement
To further boost trade and commerce, the Reserve Bank of India and the Central Bank of UAE signed what the brief calls a historic MoU for the establishment of a Local Currency Settlement (LCS) System, to promote the use of INR and AED for cross-border transactions. The MoU was exchanged during the Prime Minister's visit to Abu Dhabi on 15 July 2023. According to the brief, trade transactions in gold, crude oil and food products have already taken place with settlement in local currencies.