NEW DELHI: India and the UAE on Saturday agreed to start trading in their local currencies and interlink their payment and messaging systems during Prime Minister Narendra Modi’s day-long visit to Abu Dhabi. Besides, an IIT Delhi campus will be set up in UAE’s capital.
The warmth of the bilateral ties was on full display as UAE President Sheikh Mohamed bin Zayed Al Nahyan welcomed Modi with an embrace at the presidential palace. They also exchanged friendship bands.
“The manner in which ties between our countries have expanded, you have made a big contribution to that. Every person in India views you as a true friend,” the prime minister told the UAE President.
“Trade in local currencies is a very important aspect of India-UAE cooperation. It paves the way for enhanced economic collaboration and will make international financial interactions simpler,’’ Modi said. This was his fifth visit to UAE in the past eight years.
Modi’s wide-ranging talks with the UAE President, covered trade and investment, fintech, energy, renewables, climate action, higher education and people-to-people ties. The discussions also covered regional and global issues.
India-UAE trade rose to $85 billion in 2022, making the UAE India’s third-largest trading partner for the year 2022-23 and India’s second-largest export destination. India is the UAE’s second-largest trading partner. In February 2022, India became the first country with which the UAE signed a CEPA. Bilateral trade has increased by about 15% since the CEPA came into force on May 1, 2022.
The two leaders reaffirmed their joint commitment to fight extremism and terrorism, including cross-border terror, at both the regional and international levels.
Peekay Intermark Limited and YES Bank became the first users for settling their gold transaction in Indian rupees under the newly set up local currency system. Peekay also set up their payment under the Comprehensive Economic Partnership Agreement (CEPA) between the two countries.
In all, three Memoranda of Understanding (MoUs) were exchanged by both sides. “The MoU on establishing a framework for the use of local currencies for transactions between India and the UAE aims to put in place a Local Currency Settlement System (LCSS) to promote the use of INR and AED (Emiriti Dirham) bilaterally,” an official statement said.