India, UAE Formalize $3 Billion LNG Deal, Set Sights on $200 Billion Trade Target by 2032
By Cygnus | 20 Jan 2026
NEW DELHI — India and the United Arab Emirates (UAE) have formalised a landmark liquefied natural gas (LNG) supply agreement valued at up to $3 billion, reinforcing a fast-expanding strategic and economic partnership between the two nations.
The agreement was finalised during UAE President Sheikh Mohamed bin Zayed Al Nahyan’s short official visit to New Delhi on January 19, where he held talks with Prime Minister Narendra Modi. Alongside energy cooperation, both leaders reaffirmed a shared roadmap to double bilateral trade to $200 billion by 2032, expanding collaboration beyond hydrocarbons into logistics, investment, technology and defence.
Energy Security Boost
Under a binding sales and purchase agreement (SPA), ADNOC Gas will supply 0.5 million metric tonnes per annum (mmtpa) of LNG to Hindustan Petroleum Corporation Ltd (HPCL) for a 10-year term starting in 2028.
The contract strengthens India’s long-term supply security at a time when global gas markets remain exposed to geopolitical shocks, seasonal price volatility, and competition from Europe and East Asia for long-term cargo availability.
ADNOC Gas said the agreement lifts the cumulative value of its long-term LNG arrangements with Indian buyers to more than $20 billion, highlighting India’s rising importance in the UAE’s long-term gas export strategy. The company also described India as the UAE’s largest LNG customer, underscoring the shift of Gulf energy flows toward stable Asian demand.
Trade and Investment Corridor Deepens
The LNG agreement forms part of a wider push to elevate the India–UAE economic corridor into one of the world’s most high-impact bilateral partnerships. Officials said both leaders agreed to accelerate trade facilitation, investment linkages and sectoral cooperation to reach the $200 billion trade goal within the next six years.
The UAE remains one of India’s largest trade partners and a major source of inward investment in infrastructure, ports, logistics, fintech and energy. For Indian companies, the Gulf state increasingly serves as a commercial gateway into wider West Asia and Africa.
Strategic Defence Cooperation Gains Momentum
Beyond trade and energy, India and the UAE signed a Letter of Intent (LOI) to work towards a Strategic Defence Partnership, signalling deeper cooperation in security coordination, defence training and industrial engagement.
India’s Foreign Secretary Vikram Misri said the defence partnership should not be interpreted through a regional conflict or escalation lens, emphasising that the framework is aimed at strengthening mutual security interests and enhancing institutional cooperation.
The agreement reflects a wider trend in West Asia, where Gulf countries are recalibrating trade and security partnerships amid shifting geopolitical alignments and intensifying competition across energy, technology and critical infrastructure.
Brief Summary
India and the UAE have formalised a long-term LNG supply agreement valued at up to $3 billion, under which ADNOC Gas will supply 0.5 mmtpa of LNG to HPCL for 10 years starting in 2028. The agreement was confirmed during UAE President Sheikh Mohamed bin Zayed’s visit to New Delhi, where both countries also reaffirmed a plan to raise bilateral trade to $200 billion by 2032 and signed an LOI toward a strategic defence partnership.
Why This Matters for Markets and Business
- Energy security: Long-term LNG supply reduces exposure to spot-market price spikes and supply disruptions.
- Asian LNG competition: Securing contracts early strengthens India’s position as global LNG demand rises.
- Trade acceleration: The $200 billion target implies fast expansion in logistics, manufacturing, and services trade.
- Defence-industrial linkages: Defence LOI signals deeper cooperation in training, security, and industry participation.
- Gulf energy strategy: UAE’s focus on long-term Asian customers supports stable demand planning and export economics.
FAQs
Q1: What does the India–UAE LNG deal involve?
The agreement covers supply of 0.5 million metric tonnes per year (mmtpa) of LNG from ADNOC Gas to HPCL for a 10-year term starting in 2028.
Q2: How much is the LNG deal worth?
The contract is valued at up to $3 billion over the full term.
Q3: Why is this deal important for India?
It strengthens long-term energy security, improves supply predictability, and reduces exposure to volatility in global spot LNG prices.
Q4: What is the broader trade goal between India and the UAE?
Both countries have set a target to double bilateral trade to $200 billion by 2032, covering sectors such as energy, logistics, technology, manufacturing and services.
Q5: Does the defence partnership mean military involvement in the region?
No. Indian officials have clarified that defence cooperation does not imply involvement in regional conflicts and should not be viewed as military escalation.
Q6: Why is the UAE prioritising long-term LNG contracts with India?
India provides large, stable and rising LNG demand, making it a strategic anchor market for long-term export planning.