Apart from gold imported from the UAE, India now pays for other goods in Indian rupees, the national currency. In December 2023, India bought crude oil from the UAE for the first time by paying Rs.
In July 2022, the Reserve Bank of India (RBI) allowed payments to importers in rupees and exporters to make payments in local currency.
Last July, India and the UAE reached an agreement to conduct bilateral trade in local currencies. The two countries had signed a Comprehensive Economic Partnership Agreement in this regard. India took this important decision to prevent the infallibility of the dollar and increase the strength of the rupee. This will also reduce the impact of dollar appreciation and global economic slowdown on India’s transactions.
India is moving to sign bilateral trade agreements with more Gulf countries in local currencies. Prime Minister Narendra Modi and UAE President Sheikh Mohammed bin Zayed Al Nahyan held several meetings in a concerted effort to improve economic ties between India and the UAE.
Recently there were reports that the UAE is planning to invest $5,000 crore in India. This is part of the UAE’s economic diversification plans to increase its non-oil revenues. The leaders of the two countries held a discussion during the World Conference on Climate Change held in the UAE last July.
Sheikh Mohammed had attended the 10th Vibrant Gujarat Summit that concluded in Ahmedabad last week and participated in a road show with Modi. Modi will arrive in Abu Dhabi on 14th of next month. He is coming to the UAE to inaugurate Baps Mandir, the first ancient stone temple built in the UAE.