UAE Becomes India’s Second-Largest LNG Supplier After New Agreement

India and the United Arab Emirates signed an important long-term energy deal during the January 2026 visit of UAE President Sheikh Mohamed bin Zayed Al Nahyan. Under this agreement, the UAE will supply 0.5 million metric tonnes of LNG annually to India. This deal has made the UAE India’s second-largest LNG supplier after Qatar and further strengthened bilateral relations.

Why in News?

India and the UAE signed a long-term LNG supply agreement during the official visit of Sheikh Mohamed bin Zayed Al Nahyan to New Delhi. With this deal, the UAE has become India’s second largest supplier of Liquefied Natural Gas (LNG) after Qatar.

Long-Term LNG Agreement

• The most significant outcome of the visit was the long-term agreement for the supply of 0.5 million metric tonnes of LNG per year to India.
• LNG is a cleaner fossil fuel used widely for power generation, industry, and cooking gas. India’s energy demand is increasing rapidly due to economic growth and urbanisation.
• This agreement ensures a stable and reliable energy supply at a time of global energy uncertainty.
• The UAE has traditionally been a major oil supplier, and this LNG deal expands cooperation into cleaner energy sources.
• By diversifying suppliers beyond Qatar, India reduces supply risks and improves long-term energy security, which is crucial for sustainable economic development.

Trade, Defence, and Economic Cooperation

• Beyond energy, both countries agreed to set an ambitious bilateral trade target of USD 200 billion by 2032.
• Currently, India–UAE two-way trade stands at USD 84 billion (2023–24), making the UAE one of India’s largest trading partners.
• The leaders also agreed to move forward on a strategic defence partnership, reflecting growing security cooperation in the Indian Ocean region and West Asia.
• Investments, infrastructure, fintech, logistics, and digital trade are emerging as key growth areas.
• The Comprehensive Economic Partnership Agreement (CEPA) between the two countries continues to play a major role in boosting trade and investment flows.

Nuclear and Clean Energy Cooperation

• The discussions also touched upon new and emerging areas, including civil nuclear cooperation.
• Following India’s legislative reforms such as the Shanti Act for sustainable nuclear energy development, opportunities have opened for international collaboration.
• Nuclear energy is seen as a key component of India’s clean energy transition.
• The UAE, which operates advanced nuclear power plants, can share expertise and technology.
• This cooperation aligns with global climate goals and India’s commitment to reducing carbon emissions while meeting rising energy demand through diversified and sustainable sources.

Key Summary at a Glance

Question

Q. Which country became India’s second-largest supplier of LNG after the January 2026 agreement?

A. Saudi Arabia
B. United States
C. United Arab Emirates
D. Russia