New Delhi: After discussions between Prime Minister Narendra Modi and President Sheikh Mohamed bin Zayed Al Nahyan, India and the United Arab Emirates jointly announced on Saturday, July 15, the commencement of a trade settlement using their respective local currencies.
Further, the Indian Unified Payments Interface will be interconnected with the Gulf kingdom’s Instant Payment Platform (IPP).
The Indian PM was in UAE for a day-long visit from Paris. He left for New Delhi after talks with the UAE leadership.
As per an official statement, the Reserve Bank of India (RBI) Governor Shaktikanta Das and the Central Bank of the UAE Khaled Mohamed Balama have signed two Memoranda of Understanding (MoUs).
I had the pleasure of welcoming Indian Prime Minister @narendramodi to Abu Dhabi today. We discussed the ongoing progress of our bilateral ties, our shared interest in promoting sustainable global growth, and ways to further boost collaboration between our countries & our people. pic.twitter.com/J7bqEW76HA
— محمد بن زايد (@MohamedBinZayed) July 15, 2023
The first aims to establish a framework that encourages the utilisation of local currencies, specifically the Indian rupee (INR) and the UAE Dirham (AED), for cross-border transactions.
The second MoU focuses on cooperation for interlinking their payment and messaging systems.
The primary objective of the MoU on establishing a framework for the use of local currencies is to implement a Local Currency Settlement System (LCSS) that promotes bilateral use of the INR and AED for transactions between India and the UAE.
Modi emphasised that the agreement for trade settlement in the currencies of both nations exemplifies the robust economic cooperation and mutual trust shared by India and the UAE.
Three transformative MoUs were exchanged:
1️⃣ MoU between @RBI & @centralbankuae for the establishment of a framework to promote the use of local currencies (INR – AED) for cross-border transactions
2️⃣ MoU between @RBI & @centralbankuae for the bilateral cooperation on… pic.twitter.com/ITqvPKGGKq
— Arindam Bagchi (@MEAIndia) July 15, 2023
In his public remarks, Modi highlighted that trade between India and the UAE has experienced a notable 20% growth since the signing of the Comprehensive Economic Partnership Agreement in the previous year
On the Memoranda of Understanding (MoUs) between the central banks, the Indian PM said, “This is a very important aspect of India-UAE cooperation. It paves the way for enhanced economic collaboration and will make international financial interactions simpler”.
India’s ministry of Education and Abu Dhabi’s Education and Knowledge Department (ADEK) also signed an MoU to establish a campus of the Indian Institute of Technology (IIT) Delhi in the Gulf country. This agreement marks the second IIT to announce the establishment of an offshore campus, following IIT Madras in Tanzania.