Interests First: The UAE’s India-Pakistan Imbalance

On January 16, Pakistani Prime Minister Shehbaz Sharif called on the United Arab Emirates (UAE) to help mediate the crisis over Kashmir and oversee Pakistan’s talks with India, highlighting Abu Dhabi’s role as a crucial mediator in the decades-long dispute. Speaking to Al-Arabiya TV, Sharif claimed that Abu Dhabi could assist with resolving “burning issues like Kashmir,” citing “flagrant violations of human rights” by India and urging Emirati leaders to take action.

Sharif’s appeal for Abu Dhabi’s helping hand followed a meeting in the UAE between Sharif and President Mohamed bin Zayed (MBZ) on January 12. In a joint statement, both leaders voiced their mutual desire to improve bilateral cooperation and discussed matters of regional security. Sharif also thanked MBZ for the $3 billion loan his country provided in the aftermath of devastating floods that struck Pakistan in August 2022. Both countries signed a Memorandum of Understanding (MoU) concerning diplomatic protocols, information exchange, and anti-human trafficking policies. To Pakistan’s dismay, however, the statement omitted the issue of Kashmir, despite its vital importance for Islamabad. Of course the UAE prizes its status as a key regional partner for both Pakistan and India. In principle, this factor could empower Abu Dhabi as an ideal mediator between Islamabad and New Delhi, but it has also made the country reluctant to engage in risky diplomatic ventures that offer little chance of success.

Diplomatic and Commercial Opportunities

The UAE has made mediation in regional conflicts a core pillar of its soft power projection. In October 2020, as Pakistan and India inched toward a full-blown military conflict over Kashmir, Abu Dhabi established backchannel communications with both countries and enabling them to come to a truce in March 2021. However, the UAE has shown great reluctance to help resolve the Kashmir issue, as doing so could risk upsetting its entrenched economic relations with India.

India’s moves in August 2019 to revoke Kashmir’s autonomy under Article 370 of its constitution and divide the contested area into the two territories of Jammu and Kashmir triggered further concerns about human rights violations and outright violence occurring throughout the disputed territory. Although skirmishes between the two sides—culminating in the shootdown of an Indian fighter jet over Pakistan in early 2019—did not expand into a full-scale military conflict, trade ties between Pakistan and India have essentially been frozen for the past half-decade. After India’s reclassification of Kashmir, Pakistan downgraded its diplomatic ties with its eastern neighbor, insisting that it could not accept India’s occupation. For its part, India accused Pakistan of enabling extremist activity on its side of the border after the Pakistan-based militant group Jaish-e-Mohammed attacked an Indian military convoy in Kashmir in 2019.

The UAE’s ambassador to India has eschewed involvement in the dispute, calling New Delhi’s reclassification—along with its deployment of 80,000 more troops to the region in order to quell the ensuing unrest—an “internal matter.” Abu Dhabi then-crown prince, Mohamed bin Zayed, conferred upon Indian President Narendra Modi the “Order of Zayed” medal—the country’s highest honor, indicating the UAE’s implicit acceptance of the status quo.

In the years since the incident, Abu Dhabi has expanded its investment activity in Kashmir. Emirati ministers have publicly voiced support for deeper trade ties with Jammu and Kashmir, effectively agreeing to economic engagement on India’s terms. In October 2021, the UAE and the Indian-administered governing authority of Jammu and Kashmir signed an MoU to develop infrastructure in the region, including real estate, industrial parks, IT towers, a medical college, and a specialized hospital. In January 2022, the Indian administration of the territories negotiated several investment deals with UAE-based companies during the Dubai Expo, including Al Maya Group MATU Investments LLC, GL Employment Brokerage LLC, Noon Group, and LuLu Group—the latter of which agreed to establish a food logistics hub in Srinagar, the region’s largest city. Many of these companies were already involved in commerce in Kashmir; for instance, LuLu Group already exported produce from Kashmir to the United Arab Emirates. Dubai Ports World (DP World), the UAE’s state-owned port developer, also indicated that it would connect Jammu and Kashmir to the rest of India by building a dry port there.

As the UAE has increased its investments in Kashmir, Indian and Emirati leaders also signed a free trade agreement, slashing duties on nearly 90 percent of bilaterally traded goods. Immediately after MBZ’s meeting with Sharif on January 15, India and the UAE announced an agreement on renewable energy interconnection, although no timeframe for the project’s completion has been announced.

A Potential Windfall

Currently, India is the UAE’s second-largest trading partner after China, but the two countries’ economic ties run far deeper than commerce. Because Indians make a substantial part of the UAE’s migrant workforce, consisting of around 30 percent of the country’s population, Abu Dhabi depends on cordial labor ties with India for its own economic stability. The UAE’s relations with India reflect a growing connection between India and the Gulf Cooperation Council (GCC), which has attempted to replicate India’s rapid economic growth over the last two decades.

As a bloc, the GCC is one of India’s largest trading partners, clocking in at $154 billion in trade and $14 billion in services. Negotiations for a free trade agreement continue, as these economic ties continue to blossom. India has been able to forge deep trade and strategic ties with the UAE and the wider GCC states—considerably outpacing Pakistan in this regard. This grants New Delhi a significant edge over its rival in the simmering conflict for Kashmir.

Indeed, India’s expansion of its control over Kashmir took place as Abu Dhabi and New Delhi expanded their bilateral defense cooperation, particularly in the maritime domain. Both countries seek to cooperate to ensure security in the West Indian Ocean, and their air forces have conducted joint exercises since 2018.

In other conflicts, such as Ukraine, the UAE has shown its abilities to play a delicate balancing act; it has maintained ties with Russia despite Western sanctions on Moscow, while also condemning its invasion of Ukraine and providing humanitarian assistance to Kyiv. This could be difficult in the future in the case of India-Pakistan conflict, even if Abu Dhabi attempts to balance relations with Islamabad and New Delhi, cementing its status as a regional power in the Middle East. Ultimately, owing to the UAE’s dependency on relations with India and its significant investments in Kashmir, Abu Dhabi’s ability to act as a neutral mediator over the disputed territory may diminish over time. Despite Islamabad’s best efforts, it has struggled to sway Abu Dhabi from its current position of supporting the status quo, which undermines its place as a neutral arbiter.

Ideally, the UAE would seek to help India and Pakistan discuss their differences and support a reduction in tensions, as shown by its past attempts at back-channel diplomacy. However, due to Abu Dhabi’s desire to preserve relations with both parties—and particularly with India—it appears unwilling to spend political capital on a controversial settlement of the Kashmir issue, lessening the chances of a breakthrough in the tense relations between the two nuclear powers.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.