The UAE could be the gateway to the Gulf for Indian firms, he said, and urged for greater cooperation between companies in the oil and gas, chemicals, power, construction, real estate, pharmaceuticals and health sectors of the two nations.

India is trying to negotiate a trade agreement with the Gulf Cooperation Council, comprising Saudi Arabia, UAE, Bahrain, Kuwait, Oman and Qatar.

Kamal Nath, India’s trade minister, said a meeting is scheduled with the officials of the GCC next month to take the talks forward.

Real estate project

In related developments, two Indo-UAE projects were announced on Monday. 

India's largest real estate developer, DLF, and Dubai's Nakheel will invest more than $10bn to build two townships in 40,000 acres in India, DLF said in a statement.

The first phase of the project will commence in 2007 and is expected to be completed in three years.

DLF, which is planning India's biggest initial public offering of more than $2bn, has formed an equal joint venture with Nakheel for the projects.

New Delhi-based DLF has so far developed 220 million square feet of property.

Indian investment

Videocon Industries, an Indian consumer goods maker, plans to invest more than $230m to set up a unit in Dubai, VN Dhoot, its chairman has said.

"The Dubai government has invited the company to set up a unit. I have agreed to set up the plant," Dhoot said.

The company has sought tax incentives and partnership with the government for the proposed venture.

Dhoot said he would meet government officials next week to discuss the proposed venture, which would help Videocon tap the Middle East consumer goods market.

In 2005, Videocon acquired television tube operations of France's Thomson for $291m and the Indian unit of Swedish firm Electrolux for $76m.