Middle East Shake-Up: UAE Withdraws from Multi-Million Dollar Pakistan Project, Expands Military Ties with India and Israel

Abu Dhabi/Islamabad: The United Arab Emirates (UAE) has dealt a significant blow to Pakistan by pulling out of a major deal to manage Islamabad International Airport. According to a report by Middle East Eye (MEE), UAE had agreed in August 2025 to a privatization framework with Pakistan’s cash-strapped government, but has now exited the project. While no explicit political reason has been cited, the move comes amid growing rifts between UAE and Saudi Arabia, tensions reverberating across South Asia.

At the same time, UAE is reportedly expanding its military relations with India and Israel, including potential arms acquisitions from Israel routed through India.

Shifting Alliances in South Asia
The decision coincides with a defense pact signed last September between Saudi Arabia and Pakistan, which has long maintained close military and financial ties with Riyadh. UAE’s pivot toward India comes as it strengthens defense and trade cooperation, including a $3 billion gas supply deal and a “mega partnership” to develop an investment zone in Gujarat. UAE President Sheikh Mohammed bin Zayed Al Nahyan visited India recently, accompanied by key ministers, and both nations signed a letter of intent to explore strategic defense and nuclear technology collaboration.

Analysts suggest that UAE’s growing ties with India are part of Abu Dhabi’s broader strategy to secure its influence in the Indian Ocean and the Red Sea. Security expert Alex Jalil noted that UAE is forming overlapping security alliances with Israel, Ethiopia, and India, extending its reach from the Horn of Africa to the Indo-Pacific, particularly amid disputes over southern Yemen and maritime access points.

Pakistan-UAE Economic and Military Ties
Pakistan and UAE have historically maintained strong commercial links, particularly in civil aviation. Pakistan played a key role in establishing Emirates Airlines in the 1980s. UAE’s GAAC company also operates ground services at airports in Kabul, Herat, and Kandahar. Additionally, Saudi Arabia has provided substantial financial support to Pakistan, including a $6 billion package in 2018, and holds billions in Pakistan’s central bank.

With Pakistan signing a defense pact with Saudi Arabia, UAE is increasingly moving closer to India, signaling a major realignment of regional alliances in the Middle East and South Asia.