Reliance Industries, India's largest private petrochemicals company, will develop a major new chemicals facility in partnership with Abu Dhabi National Oil Company at the new Ta'ziz Industrial Chemicals Zone in Ruwais.
It is understood that the deal, the first for Mukesh Ambani's Reliance Industries in the Middle East, is worth $2 billion.
The UAE and Indian companies will develop a facility to produce chlor-alkali, ethylene dichloride and polyvinyl chloride (PVC) within the zone.
Ta'ziz is a joint venture between Adnoc and state holding company ADQ being developed to use refined products as the basis for a range of chemicals and other derivatives used by industry.
The products being produced by the Reliance joint venture, particularly PVC, has a range of uses in pipes, flooring, medical equipment, cables and the automotive industry, among others.
The deal advances "India-UAE cooperation in value enhancement in the energy and petrochemicals sectors," said Mr Ambani, chairman and managing director of Reliance Industries and Asia's wealthiest man.
"The project will manufacture ethylene dichloride, a key building block for production of PVC in India. This is a significant step in globalising Reliance’s operations and we are proud to partner with Adnoc in this important project for the region," he added.
India is a key importer of Middle East crude, particularly from the UAE, and has looked to strengthen its energy partnership over the last few years.
Reliance, Adnoc and Saudi Aramco have previously joined forces to develop a massive $70bn greenfield integrated refining and petrochemicals complex in Maharashtra state on India's west coast.
"In line with our 2030 strategy, we look forward to creating further opportunities across the entire Ta’ziz ecosystem for the next generation of local industry," said Dr Sultan Al Jaber, UAE minister of industry and advanced technology and Adnoc managing director and group chief executive.
"The domestic production of critical industrial raw materials strengthens our supply chains, drives in-country value and accelerates the UAE’s economic diversification," he added.
The industrial raw material plant being built by Adnoc and Reliance will have the capacity to produce 940,000 tonnes of chlor-alkali, 1.1 million tonnes of ethylene dichloride and 360,000 tonnes of PVC on an annual basis.
The manufacture of these chemicals will "create opportunities for local industry to source critical raw materials in the UAE for the first time," Adnoc said in a statement.
The production of critical chemicals will create opportunities for domestic manufacturing and will feed into other sectors.
Chlor-alkali is essential for the manufacturing of caustic soda, which is in turn used in producing aluminium