During Prime Minister Narendra Modi’s visit to the UAE, India and the UAE agreed to facilitate trade settlement in their respective currencies and integrate their fast payment systems. The move aims to simplify international financial interactions and promote bilateral economic cooperation. Three Memoranda of Understanding were exchanged, focusing on the use of local currencies for cross-border transactions, cooperation on interlinking payment and messaging systems, and the establishment of an IIT Delhi campus in Abu Dhabi.
Enhanced Economic Partnership and Trade Target
Prime Minister Modi and UAE President Sheikh Mohamed bin Zayed Al Nahyan expressed satisfaction with the expanding economic partnership and aimed to achieve a target of USD 100 billion in bilateral trade before the G-20 meeting in Delhi in September. The leaders emphasized the significance of the strong bilateral ties and the warmth of their relationship. They exchanged compliments and discussed the contribution made by both countries in strengthening their mutual cooperation.
Local Currency Settlement System and Payment System Integration
The memorandum of understanding (MoU) on the use of local currencies aims to establish a Local Currency Settlement System (LCSS) to promote bilateral transactions in Indian Rupees (INR) and Emirati Dirhams (AED). Additionally, the central banks of India and the UAE agreed to cooperate on linking their Fast Payment Systems, namely the Unified Payments Interface (UPI) and the Instant Payment Platform (IPP), respectively. The integration of payment and messaging systems will simplify financial transactions between the two countries.