UAE to build free zone for defense manufacturers amid Iran attacks

The UAE said it’s going to build a free zone in Abu Dhabi designed to attract foreign defense manufacturers, acting days after Iran renewed attacks on its oil installations.

The industrial complex in the capital city’s Al Selmiyyah district will be developed in partnership with Abu Dhabi-backed AD Ports and coordinated with state-owned military contractor EDGE and ADNOC, the national oil company, according to a statement published by the Emirates News Agency on Wednesday.

“The initiative marks a significant step in advancing the UAE’s efforts to build an advanced and sustainable national defense industrial base that strengthens national security and enhances long-term defense readiness,” the UAE’s Tawazun Council for Defense Enablement said in the statement.

The project was announced in Abu Dhabi at the “Make it in the Emirates” expo after Bloomberg reported that senior UAE officials have held preliminary talks on creating a new investment vehicle to buy stakes in foreign defense companies. Among those reported to have participated were Crown Prince Sheikh Khaled bin Mohammed and Mubadala CEO Khaldoon Al Mubarak.

Mideast conflict stokes Gulf investment in defense, energy

Gulf states are ramping up investments and financial support tied to defense and energy, channeling billions of dollars into security-linked companies as the conflict with Iran reshapes priorities across capital markets and government policy.

Abu Dhabi-based BlueFive Capital is planning a $3 billion fund focused on aerospace and defense, targeting companies tied to military and advanced technologies as the UAE positions itself as a hub for security-related investment, Bloomberg reports.

At the same time, Saudi Arabia is reinforcing its geopolitical alliances by providing Pakistan with $3 billion in fresh financing and extending a separate $5 billion deposit, helping Islamabad stabilize its reserves and meet external obligations, including a loan repayment to the UAE.

The support is an indicator of Pakistan’s reliance on Gulf backing amid financial strain, with the repayment accounting for a significant share of its foreign reserves and highlighting the strategic role of Gulf capital in regional stability.

Beyond defense and finance, Indonesia’s sovereign wealth fund Danantara is increasing its focus on the Middle East, planning major investments in energy security, critical minerals and infrastructure, as global investors pivot toward assets tied to supply resilience and long-term strategic needs.

ADNOC signs $3 billion LNG deal with Hindustan Petroleum

India signed a $3 billion deal to buy liquefied natural gas from the United Arab Emirates, making it the UAE’s largest LNG customer, as the two countries moved to deepen trade and defense ties.

The agreement was struck during a visit by UAE President Sheikh Mohamed bin Zayed, with both sides pledging to double bilateral trade to $200 billion within six years and pursue a strategic defense partnership.

According to the agreement, Abu Dhabi state firm ADNOC Gas will supply half a million tons of LNG a year to Hindustan Petroleum over 10 years, taking ADNOC’s total contracts with India to more than $20 billion.

Indian officials asserted that defense cooperation with the UAE would not draw New Delhi into regional conflicts, despite shifting alliances in the Gulf.