India doubles down on MENA ties in search of energy, compute for AI, and defense sales

India just spent a state visit making clear it has no intention of backing away from the Gulf — even with the region at war. Prime Minister Narendra Modi left Abu Dhabi last week with a UAE pledge of up to USD 5 bn, a clutch of energy, defense and AI agreements. Throw in a handful of recent Indian moves to shore up its fertilizer supply with stocks from MENA+, and it’s clearer than ever that New Delhi is leaning into our region.

The logic is brutally simple: MENA is India’s single largest source of crude and LNG, the feedstock for the fertilizer its farm economy runs on, and the workplace for some 9 mn Indian nationals whose remittances home are among the country’s most dependable sources of hard currency.

Where’s the USD 5 bn coming from? ADIA and India’s National Investment and Infrastructure Fund are exploring up to USD 1 bn in infrastructure. IHC will invest USD 1 bn into Sammaan Capital. And India has cleared Emirates NBD’s c. USD 3 bn takeover of RBL Bank, the largest foreign investment ever into Indian banking. On the energy side, an ADNOC pact with India’s strategic petroleum reserve operator expands UAE crude held in-country toward 30 mn barrels, alongside a long-term LPG supply deal with Indian Oil.

On defense, the two sides agreed a framework for a strategic partnership that includes industrial collaboration, technology sharing, and regional security coordination, though the communiqué was thin on specifics.

Defense has become a top national priority for the UAE since the strikes and disruption that forced it to rethink parts of its strategy and approach to supply-chain resilience. Analysts told our UAE desk the country is moving to localize and own more of the end-to-end defense supply chain. India has some of what the UAE is shopping for: Make in India has built a defense-industrial base that turns out missiles, artillery and naval vessels at price points well below Western alternatives.

We’re keeping a close eye on the AI agreements: G42 and the Indian government formalizedthe commercial framework for Condor Galaxy India, an eight-exaflop AI supercomputer built from 64 Cerebras CS-3 systems — nearly 19 times the combined peak capacity of India’s two flagship machines. G42 will build and run the cluster, but the system sits under Indian governance with all data held inside national jurisdiction. Abu Dhabi is supplying the hardware and operating muscle while New Delhi keeps sovereignty over the intelligence it produces.

That’s the template the Gulf is now selling down the corridor: Compute as statecraft that also routes demand straight back to Abu Dhabi’s own stack. The CS-3 is Cerebras silicon, and Cerebras is the G42-backed chipmaker that priced a USD 5.55 bn Nasdaq IPO days earlier with the bulk of its revenue already tied to the Emirati AI complex. We called this bet when the project first surfaced in February.

But nowhere are India’s Gulf ties more critical than in fertilizer. State-run Indian Potash (IPL) has just locked in over 1.3 mn tons of diammonium phosphate (DAP), 42% of it from producers in our region. Saudi takes the lion’s share — over 400k tons from the likes of Ma’aden and VB Venture — while Egypt, Morocco and Jordan together send roughly 156.5k tons. Egyptian producers are also in for an estimated 15% of an international tender to supply India with 2.5 mn tons of nitrogen fertilizers this June. The deals were struck in the last week at roughly double pre-war pricing.

India also wants to own the supply: Three Indian companies are reportedly weighing investments that could be worth as much as a combined USD 1 bn in Egypt’s phosphate and fertilizer sector, including extraction, manufacturing, and export-linked logistics hubs in Ain Sokhna and the New Valley. And India’s fertilizers minister met Saudi’s industry minister last week to tighten phosphate and fertilizer cooperation and open the door to private-sector participation. India has decided fertilizer is too important to leave to the spot market — the same conclusion it reached on crude.