India–UAE Strengthen Defence Ties as Trade Target Reaches $200 Billion by 2032, Including UAE Investment in Dholera Smart City
Table of Contents
- Defence Cooperation Anchors the Strategic Partnership
- UAE Investment in Dholera Smart City Takes Centre Stage
- Airport, Port, and Aviation Infrastructure at the Core
- Energy Infrastructure and Renewable Power Ecosystem
- Semiconductor Manufacturing and Industrial Growth Prospects
- Trade, Finance, and Long-Term Economic Integration
- Outlook for Dholera Smart City Development in 2026
India and the United Arab Emirates have agreed to significantly deepen their comprehensive strategic relationship, setting an ambitious target of doubling India UAE bilateral trade to USD 200 billion by 2032. The announcement followed high-level talks between Prime Minister Narendra Modi and UAE President Sheikh Mohamed bin Zayed Al Nahyan during the latter’s official visit to India in January 2026.
A key highlight of the discussions was the growing alignment on Defence cooperation, infrastructure development, and long-term economic collaboration, reinforcing the broader India-UAE strategic partnership across political, industrial, and people-to-people domains.
Defence Cooperation Anchors the Strategic Partnership
Defence and security cooperation emerged as a central pillar of the renewed engagement. Both leaders welcomed the signing of a Letter of Intent toward a Strategic Defence Partnership, reaffirming their commitment to strengthening the Defence industrial corridor and maintaining close coordination on regional and global security challenges.
This cooperation reflects the evolving nature of India Middle East relations, where defence manufacturing, logistics, and industrial capability are increasingly integrated with economic and technological collaboration. The emphasis on defence production also aligns with India’s broader efforts to strengthen its manufacturing base and improve global supply chain integration.
UAE Investment in Dholera Smart City Takes Centre Stage
One of the most significant outcomes of the talks was the decision to explore UAE investment in Dholera Smart City, a flagship infrastructure and industrial development project in Gujarat. The Gujarat government and the UAE Ministry of Investment signed a Letter of Intent to collaborate on the development of Dholera as a next-generation industrial and urban hub.
The proposed partnership focuses on large-scale infrastructure development, positioning Dholera as a strategic node for industrial growth and international connectivity. The project is being led by Dholera Industrial City Development Limited, which oversees planning and execution within the Dholera Sir Special Investment Region.
Airport, Port, and Aviation Infrastructure at the Core
The infrastructure roadmap under the partnership includes the development of a Dholera International Airport, a greenfield Dholera Port, and advanced aviation facilities. These aviation components include a pilot training school and an aircraft MRO in India, strengthening India’s aviation maintenance and services ecosystem.
Key infrastructure highlights include:
- Dholera International Airport for global connectivity
- Dholera Port for trade and logistics
- Aircraft MRO in India to support aviation services
- Improved rail and road connectivity via the Ahmedabad-Dholera Expressway
Enhanced air and maritime connectivity will integrate Dholera with regional and global trade routes, supporting industrial operations and export-oriented manufacturing. Improved road connectivity through the Ahmedabad-Dholera Expressway further strengthens the region’s logistical advantages and reduces the barrier between Dholera and Ahmedabad.
Energy Infrastructure and Renewable Power Ecosystem
Energy infrastructure forms another critical pillar of the partnership. The development strategy includes renewable power systems to support energy-intensive industries and long-term sustainability goals. The Dholera Smart City Project has been designed with a focus on future-ready energy infrastructure and industrial power requirements.
The energy plan supports industrial expansion and sustainable growth while creating a reliable power ecosystem for new manufacturing projects and international investments.
Semiconductor Manufacturing and Industrial Growth Prospects
The infrastructure and energy ecosystem at Dholera also supports India’s ambitions in semiconductor manufacturing. The presence of the Tata Semiconductor fab highlights the region’s readiness for high-value manufacturing. These developments contribute directly to industrial growth, creating a foundation for electronics, advanced manufacturing, and export-led industries.
Semiconductor manufacturing requires stable power, efficient logistics, and integrated infrastructure-all of which are being addressed under the Dholera development framework.
Trade, Finance, and Long-Term Economic Integration
Trade between India and the UAE has already shown strong momentum since the signing of CEPA in 2022, reaching USD 100 billion in FY 2024–25. The new USD 200 billion target reflects confidence in deeper economic integration, including MSME cooperation, financial services, and infrastructure financing.
The leaders also welcomed growing financial collaboration, including the presence of UAE institutions in GIFT City, further reinforcing India’s role in regional finance and trade facilitation.
Outlook for Dholera Smart City Development in 2026
The outcomes of the January 2026 visit underline a shared vision for long-term collaboration. By combining defence cooperation, infrastructure-led development, clean energy, and advanced manufacturing, the India-UAE strategic partnership is evolving into a comprehensive growth model.
With Dholera Sir Smart City positioned at the intersection of infrastructure development, industrial expansion, and global connectivity, UAE participation marks a strategic step toward shaping India’s next phase of economic transformation.
