India’s campaign to position itself as a weapons supplier to the UAE is running into a hard commercial reality. Despite high-level political alignment, recent bilateral trade data reveals a widening gap between diplomatic statements and tangible procurement orders.

The defense trade flip: Indian defense exports to the UAE halved in FY 2025 to USD 1.3 bn, while imports from the UAE skyrocketed over 71% to an all-time high of USD 3.1 bn, as per India’s Commerce Ministry data.

“The data does suggest that India-UAE defense trade remains episodic rather than structural,” Lt. Gen. Deependra Hooda, a defense expert and retired Indian Army Commander, tells EnterpriseAM.

One-off transactions: Aircraft, spacecraft, and ships accounted for more than 99.8% of India-UAE defense trade between FY 2022 and FY 2025, while arms and ammunition represented just 0.16% of total flows and never exceeded USD 10.2 mn in annual exports. The numbers point to a relationship driven by a handful of large aerospace and maritime transactions rather than an integrated defense supply chain.

The view is echoed by civilian experts. “The UAE is diversifying its defense partnerships and wants systems that are battle-tested and deployable immediately,” Kabir Taneja, executive director at Observer Research Foundation Middle East, tells EnterpriseAM.

The challenge: Converting the existing strategic framework into a visible portfolio of defense orders, joint ventures, and manufacturing projects. That requirement has benefited suppliers such as South Korea, whose defense industry combines access to Western technology, rapid production cycles, and proven operational credibility, says Taneja.

On paper, the defense ties appear strong. New Delhi and Abu Dhabi inked a Strategic Framework for Defense Industrial Collaboration during UAE President Sheikh Mohammed bin Zayed Al Nahyan's January visit to India, covering defense industrial cooperation, special operations, and counterterrorism.

“We should be measuring outputs rather than hailing agreements. We have to see how many contracts have been signed, how many joint production facilities have been set up, and how technology sharing is progressing. If these indicators are not visible in the next two years, the agreement would need a serious high-level review,” Hooda says.

By the numbers: India’s defense exports touched an all-time high of USD 4.4 bn in FY 2026. Annual defense production reached a record USD 20.7 bn in FY 2026, up 15.6% y-o-y from USD 17.9 bn.

However, there is a credibility gap: Despite growing exports, India still lacks the track record required to convince Gulf buyers that its systems can be reliably deployed in modern warfare environments — and limited private-sector participation is a barrier to scaling defense cooperation. “India's domestic defense ecosystem continues to struggle with research and development, industrial capacity, and delivery timelines,” Taneja argues.

“The frustration is real, well-documented, and shared by virtually every country that has attempted to do defense business with India,” Hooda says, describing India’s procurement system as excessively complex, opaque, and slow. The result is a mismatch between political intent and commercial execution. Despite strong leadership-level ties, major defense projects have struggled to materialize, he argues.

“Much of the cooperation so far has focused on training and military exercises. The UAE has capital, and India has manpower. There is a natural case for joint R&D,” Taneja says. India's Atmanirbhar Bharat program and the UAE's push for defense indigenization mean both countries increasingly want domestic manufacturing and technology ownership. This creates a natural convergence around joint research, production, and intellectual property sharing.

On the menu: The BrahMos cruise missile (a joint India-Russia production) is a capable system, but the UAE can buy similar technology from Western suppliers while also gaining political advantages from those purchases, Taneja notes. Akash is a cost-effective air defense system, but the UAE already operates a sophisticated, layered air and missile defense ecosystem involving US systems, says Hooda. While systems such as BrahMos have attracted attention, both experts note that Emirati systems remain deeply integrated into Western defense ecosystems, particularly US systems.

The UAE increasingly demands indigenization. It is building its own defense ecosystem through companies such as Edge Group. Future cooperation will likely require co-development and industrial partnerships — like its pact with Adani Defense & Aerospace — rather than a simple buyer-seller relationship.

A realistic ceiling for defense trade is USD 2-3 bn annually over the next five years, Hooda estimates. “Private-sector partnerships are more agile and have [windows] to get into niche technology areas like counter-drone systems, unmanned systems, electronic warfare, and cyber. For the partnership to succeed, it needs to produce commercially viable systems in the next few years,” Hooda says.

And the government needs to get out of the way? “The government still exercises significant control over defense manufacturing. The gap between government and private industry must be reduced. Private firms need greater freedom to develop and market technologies. Defense is highly competitive, and India should not be constraining its own industry,” Taneja argues.