To enhance bilateral trade between India and the United Arab Emirates (UAE), Commerce Minister Piyush Goyal recently announced plans for Rupee-Dirham trade. This move promises significant benefits for both nations, making it easier and more cost-effective to transfer funds from the UAE to India. During his visit to the UAE for the 11th India-UAE High-Level Task Force meeting, Minister Goyal, accompanied by a team of officials, shared this exciting news with the media.
Rupee-Dirham Trade
Minister Goyal revealed that discussions with the Reserve Bank of India (RBI) and the UAE Central Bank had concluded successfully. The decision to implement the Rupee-Dirham trade on a larger scale in collaboration with the industry and banking sectors was reached. This initiative aims to save up to 5% on total trade by conducting transactions in local currencies, simplifying cross-border commerce.
Expanding Investment Horizons
The discussions also revolved around establishing food and industrial parks in India. UAE investors expressed interest in sectors such as financial services, clean energy, infrastructure, education, healthcare, food processing, and more in India. The aviation sector in India has gained the trust of UAE investors, and the Indian government actively supports the transportation and tourism sectors.
Minister Goyal emphasized that the potential for investments and relations between the two nations knows no bounds. Both countries also expressed interest in the petroleum and petrochemical sectors, covering exploration, production, marketing, and sales. Notably, India and the UAE initiated a free trade agreement in May of the previous year, resulting in bilateral trade reaching $84.9 billion in 2022–23, up from $72.9 billion in 2021–22.
NPCI’s Partnership with AI Etihad
Another significant development in the India-UAE trade landscape is the collaboration between NPCI International Payments and AI Etihad Payments of the UAE. This partnership, witnessed by Commerce Minister Goyal, enables people in both countries to make real-time cross-border payments at a reduced cost. It effectively makes international transactions as straightforward as domestic ones, ensuring transparency in currency exchange rates and transaction fees.
This agreement allows individuals to use domestic cards for cross-border transactions, eliminating the need for global cards. It integrates India’s Unified Payments Interface (UPI) with the UAE’s Instant Payments Platform (IPP), facilitating easy UPI transactions. Furthermore, there will be a connection between India’s RuPay Switch and UAE Switch, making sending cash directly from cards possible. This collaboration is particularly beneficial for the 3.5 million Indians employed in the UAE.
The India-UAE trade relationship is poised for significant growth with the introduction of the Rupee-Dirham trade and the NPCI’s partnership with AI Etihad Payments. These developments not only simplify cross-border transactions but also open up diverse investment opportunities across sectors. As bilateral trade continues to flourish, both nations can look forward to a prosperous economic partnership.
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