The United Arab Emirates (UAE) is contemplating a substantial investment of up to $50 billion in India, its second-largest trading partner, as part of its commitment to the world's fastest-growing major economy.
While the details are not yet public, provisional pledges from the UAE are expected to be announced early next year, according to reports by The Times Of India.
These potential investments follow Indian Prime Minister Narendra Modi's meetings with UAE President Sheikh Mohammed bin Zayed in July, where the two nations reaffirmed their commitment to strengthening ties.
Over the past decade, India and the UAE have aimed to boost non-oil bilateral trade to $100 billion.
Deals under consideration involve acquiring stakes in vital Indian infrastructure projects and state-owned assets. Some of these investments may involve UAE sovereign wealth funds, including the Abu Dhabi Investment Authority (ADIA), Mubadala Investment Company and ADQ.
However, specific timelines for these investments have not been finalised, and the exact size and timing of the announcements are yet to be determined.
Sheikh Tahnoon bin Zayed Al Nahyan, chairman of International Holding Company and the UAE president's brother, has also engaged in early-stage discussions about investing billions of dollars in India.
Sheikh Tahnoon's recent 5 per cent stake in Gautam Adani's flagship conglomerate further underscores the UAE's growing interest in the Indian market.
For the UAE, investing in India offers an opportunity to tap into the rising middle class and diversify away from traditional investment destinations.
It aligns with a broader strategy to position itself as a neutral player in a world marked by increasing US-China tensions.
As one of the world's leading sovereign wealth funds with close to 1 trillion dollar in assets, the UAE's investment in India can help bridge infrastructure gaps in the country.