India and the UAE on Saturday agreed to start trade settlement in their currencies and link the Indian Unified Payments Interface with the Gulf country’s Instant Payment Platform (IPP) as Prime Minister Narendra Modi held comprehensive talks with UAE President Sheikh Mohamed bin Zayed Al Nahyan.
In his remarks after meeting the UAE President, Modi said India-UAE trade witnessed a 20 per cent increase since the signing of the Comprehensive Economic Partnership Agreement last year.
Modi said the agreement signed on Saturday for trade settlement in the currencies of the two countries shows the strong economic cooperation and mutual trust between the two nations.
“It is always gladdening to meet HH Sheikh Mohamed bin Zayed Al Nahyan. His energy and vision for development are admirable. We discussed the full range of India-UAE ties including ways to boost cultural and economic ties,” Modi said on Twitter after the meeting.
The agreement with the UAE on trade settlement in the currencies of the two countries will boost bilateral trade and investments. Modi said he always got the love of a brother from Sheikh Mohamed bin Zayed Al Nahyan.
“The manner in which ties between our countries have expanded, you have made a big contribution to that. Every person in India views you as a true friend,” he told the UAE President.
Talking about the MoUs between the central banks of the two countries, Modi 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.”
Modi also noted that preparations for COP-28 to be held in the UAE are going on under the UAE President’s leadership, and added that he has made up his mind to participate in the conference later this year.
According to an official statement, the Reserve Bank of India and the Central Bank of the UAE signed two MoUs for establishing a framework to promote the use of local currencies viz. the Indian rupee (INR) and the UAE Dirham (AED) for cross-border transactions; and for cooperation for interlinking their payment and messaging systems.
The MoUs were signed by RBI Governor Shaktikanta Das and UAE Central Bank Governor Khaled Mohamed Balama, in the presence of Prime Minister Modi and Mohamed Bin Zayed.
The MoU on establishing a framework for the use of local currencies for transactions between India and UAE, aims to put in place a Local Currency Settlement System (LCSS) to promote the use of INR and AED bilaterally. The MoU covers all current account transactions and permitted capital account transactions, the statement issued by the RBI said.
