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How critical is UAE-India trade corridor in countering China & Red Sea tensions?

The agreement comes amid continuing Houthi attacks in the sea route that are disrupting global trade, and further indicates strengthening UAE-India relations.
The Crown Prince of Abu Dhabi General Sheikh Mohammed Bin Zayed Al Nahyan (L) walks with Indian Prime Minister Narendra Modi ahead of a meeting in New Delhi on January 25, 2017. The Crown Prince of Abu Dhabi General Sheikh Mohammed Bin Zayed Al Nahyan is on an official visit to India and will be the guest of honour at the country's forthcoming Republic Day celebrations. / AFP / Money SHARMA (Photo credit should read MONEY SHARMA/AFP via Getty Images)

India and the United Arab Emirates signed a deal on establishing a trade corridor this week, a development that could affect global trade flows amid attacks in the Red Sea and boost efforts to counter China’s Belt and Road Initiative.

What happened: The two countries signed an agreement on Tuesday related to the India-Middle East-Europe Economic Corridor (IMEC) in the presence Indian Prime Minister Narenda Modi and UAE President Sheikh Mohamed bin Zayed Al Nahyan during the former’s visit to Abu Dhabi.

In a statement, the Indian Ministry of External Affairs framed the deal as an inter-governmental framework agreement for the operation of the corridor, saying it “would build on previous understandings and cooperation on this matter and foster India and the UAE cooperation furthering regional connectivity.” The ministry did not provide additional details.

IMEC was announced on the sidelines of the G20 in September. The corridor will connect India to Europe via a shipping and rail network. India, Saudi Arabia, the UAE, the United States and several European Union states signed a memorandum of understanding (MoU) on the corridor during the summit.

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