India and UAE settle bilateral trade in local currencies
India and the UAE have started settling bilateral trade in their local currencies, the Indian government said on Monday, adding that India’s largest oil refinery paid Rs. rupees to buy 1 million barrels of oil from the Gulf state.
The Indian Embassy in the UAE said in a statement that the Indian Petroleum Corporation paid Rs. to the Abu Dhabi National Oil Company (ADNOC).
The transaction came after a deal that included the sale of 25 kilograms of gold from an Emirati gold source to a buyer in India for around 128.4 million rupees ($1.54 million).
India and UAE strengthen trade relations
In July, India signed an agreement with the UAE that allows trading in rupees rather than dollars, bolstering India’s efforts to reduce transaction costs by phasing out dollar transfers, Reuters reported.
During Indian Prime Minister Narendra Modi’s visit to the UAE, the two countries also agreed to set up a real-time payment system to facilitate cross-border money transfers.
The volume of bilateral trade between India and the UAE reached $84.5 billion between 2022 and 2023.
India is seeking similar local currency settlement agreements with other countries as it hopes to increase exports in light of the global trade slowdown.
