Ongoing war set to impact ODI flows into UAE

At a time when the ongoing political tensions in West Asia is casting a shadow of doubt into the investment potential of the GCC nations, data show that around 7 per cent of India’s monthly overseas direct investments (ODI) go to the United Arab Emirates.

RBI data show that a total of $1.2 billion was invested into the UAE as outbound direct equity investment in FY26 (April-February), making up around 7 per cent of the total ODI in the 11-month period.

The investments are largely by small- and mid-size companies typically in the areas of logistics and warehousing, manufacturing, retail/trade, restaurants and hotels. In contrast, other GCC countries attract lesser ODI from India.

Equity investments

On a monthly basis, the equity investments into the UAE are sporadic and do not follow a linear growth pattern.

In December, for instance, Reliance Industries’ $350 million investment in West Asia subsidiary Reliance Industries DMCC led to a spike in overall ODI tally in the month. Similarly, MakemyTrip and TVS Motor were among companies that made large ODI commitments into the UAE in May 2025.

In February 2026, for instance, Neo Star Infraprojects, One Point One Solutions, Power Build, Sai Krish Healthcare Services, Thriveni Earthmovers and Infra and Trejhara Solutions are among the companies with highest equity ODI in the UAE.

Similarly, Asian Paints, Bhima Jewels, Clean Max Enviro Energy Solutions and Concord Enviro Systems have made ODI in January, as per RBI data.

ODI outflow

From April 2023 to August 2025, a cumulative $5 billion has been invested in the UAE by Indian companies as ODI (equity+loan+ guarantee), which represents 10 per cent of the total ODI in this period, as per data from Department of Economic Affairs. In the last two decades (April 2000 to August 2025), the ODI outflow from India to the UAE stands at $18.3 billion, making up 5 per cent of the total ODI.

ODI refers to investments made by Indian entities/residents into foreign companies or their own foreign subsidiaries. Governed by RBI, ODI can take various forms, such as equity investment in a foreign entity (joint ventures or wholly owned subsidiaries) or loans or guarantees extended to foreign affiliates.

Overall, India’s ODI in equity for FY26 (April-February) was $18.1 billion, a 28.7 per cent rise from the same period last year. Even as the ODI saw a rise in FY26, it has been tapering down in the recent months with increased macro uncertainty.

In January 2026, ODI (equity) was down 13.6 per cent year-on-year at $1.5 billon, and in February it was $1.1 billion, again a 57.5 per cent drop y-o-y. Among the top ODIs in February were Tata Steel’s $625 million in wholly-owned subsidiary T Steel Holdings, Neo Star Infraprojects’ $27.7 million in its UAE subsidiary, and ONGC Videsh’s $52.8 million in its Mozambique JV.

Published on March 19, 2026