ALBAWABA – India signed a deal with the United Arab Emirates (UAE) that allows it to settle UAE-trade in India’s national currency, the Ruppee, instead of the United States (US) dollar, Reuters reported Saturday.
During a visit by India's Prime Minister Narendra Modi to Abu Dhabi, the Emirates and India also agreed to set up a real-time payment link to facilitate cross-border money transfers.
UAE President Sheikh Mohamed bin Zayed al-Nahyan and Prime Minister Modi met and signed the deals after an official reception at Qasr Al Watan in Abu Dhabi on Saturday, AFP reported.
These agreements will reportedly support India's efforts to cut transaction costs by eliminating dollar conversions.
The two agreements will enable "seamless cross-border transactions and payments, and foster greater economic cooperation", according to a statement from the Reserve Bank of India on Saturday.
The central banks of both countries agreed to link India's Unified Payments Interface (UPI) and UAE's Instant Payment Platform (IPP).
India is the world's third-biggest oil importer and consumer. The Indian central bank last year announced a framework for settling global trade in rupees.
But India currently pays for UAE-trade and oil in dollars, as per Reuters.
However, India could make its first rupee payment for UAE oil to Abu Dhabi National Oil Co (ADNOC) soon, Reuters reported on Friday.
Bilateral trade between the two countries reached $84.5 billion in the year from April 2022 to March 2023.
