Categories: International

India, UAE Central Banks Discuss Rupee-Dirham Trade Prospects

The central banks of India and UAE are discussing a concept paper on promoting bilateral trade in rupee and dirham with a view to reduce transaction cost, a top official said.

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More About the Development:

India’s Ambassador to the UAE Sunjay Sudhir said that the concept paper for trade in local currencies was shared by India. The central banks of both the countries will discuss the standard operating procedures and modalities.

Need Of This move:

The objective of the exercise is to reduce the cost of transactions. India and the UAE had already signed a free trade agreement (FTA) in February to give a fillip to bilateral trade and economic ties. The free trade agreement was aimed at providing significant benefits to Indian as well as UAE businesses, including enhanced market access and reduced tariffs. Following the free trade pact, bilateral trade is expected to increase from the current USD 60 billion to USD 100 billion in the next five years.

The Ongoing Trade Situation:

Bilateral trade between India and the UAE stood at USD 43.3 billion in 2020-21. Exports were worth USD 16.7 billion and imports aggregated at USD 26.7 billion in 2020-21. The two-way commerce stood at USD 59.11 billion in 2019-20.

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Piyush Shukla

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