Rupee, dirham and UPI: India, UAE push cross-border trade without friction
India and the UAE are working towards enhancing bilateral trade by adopting local currency transactions and payment system integration. The two countries aim to reduce transaction costs, improve payment access, and settle international trade using Indian rupees and UAE dirhams. Various sectors, including energy and technology, will see increased investment opportunities as a result of these…
India and the United Arab Emirates have set their sights on streamlining cross-border trade and investment by agreeing to work on multiple initiatives. These include settling transactions in local currencies and linking their financial systems, all aimed at reducing costs and increasing efficiency. The agreements were made during the 14th meeting of the India-UAE Joint Task Force on Investments, a high-level forum chaired by Commerce and Industry Minister Piyush Goyal and Abu Dhabi Investment Authority Managing Director Sheikh Hamed bin Zayed Al Nahyan.
Representatives from both countries discussed progress made on local-currency settlements, payment systems integration, and central-bank digital currencies. They agreed to support the timely implementation of these initiatives, which would help ease transaction costs and settlement times while enhancing access to cross-border payments.
To facilitate this, India's Unified Payments Interface (UPI) is to be connected with the UAE's Instant Payment Platform, and both nations are exploring the integration of their respective card switches, RuPay and UAESWITCH.
Additionally, talks centered around expanding economic ties in sectors such as energy, infrastructure, logistics, technology, artificial intelligence, space, food security, agricultural innovation, and startups. The two nations also explored strengthening air connectivity and forming an aviation and logistics hub in Dholera, Gujarat.
The Comprehensive Economic Partnership Agreement (CEPA), which entered into effect in May 2022, is being reviewed, as are joint investment projects like the Food Park in Gujarat and the planned $11.5 billion integrated aluminium complex in Odisha.
Investments such as Emirates NBD's acquisition of RBL Bank for around $3 billion and International Holding Company's $1 billion investment in Sammaan Capital were also mentioned. The UAE opened branches of Mashreq Bank, First Abu Dhabi Bank, and Abu Dhabi National Insurance Company in GIFT City.
An India-UAE Invest India office is set to become operational in the UAE before the end of 2026 to further bolster bilateral economic relations. The high-level task force, established in 2013, has been instrumental in promoting economic ties and addressing investor concerns for both nations.
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
