Prime Minister Narendra Modi receives ceremonial welcome on his arrival at Abu Dhabi Airport, in UAE on July 15, 2023.
Abu Dhabi: India and the United Arab Emirates (UAE) today agreed on establishing a framework to promote the use of local currencies (INR – AED) for cross-border transactions. In this regard, a Memorandum of Understanding (MoU) was signed between the Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates here. The RBI and the Central Bank of the United Arab Emirates also signed another MoU for bilateral cooperation on interlinking their payment and messaging systems in the presence of Prime Minister Narendra Modi and the President of UAE Sheikh Mohamed bin Zayed Al Nahyan, who is also the Ruler of Abu Dhabi.
Both the Indian Prime Minister and the UAE President, in a joint statement, said that developing the ‘Local Currency Settlement System’ between the two countries to settle bilateral trade was a reflection of mutual confidence. Moreover, it underlines the robustness of the economies in both countries and enhances the economic engagement between the UAE and India.
The leaders expressed their interest in strengthening cooperation in the payment systems area by enabling integration between their instant payment systems to process cross-border transactions between the UAE and India more efficiently. Such cooperation will also include the mutual acceptance of domestic card schemes by interlinking national card switches. Integration between these systems will enhance access to payment services for the benefit of the citizens and residents of the two countries, they said.
India-UAE trade rose to USD 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 Comprehensive Economic Partnership Agreement (CEPA). Bilateral trade has increased by approximately 15% since the entry into force of the CEPA on May 1, 2022.
The leaders reiterated their resolve to further strengthen investment ties between the two countries. In this context, they appreciated the efforts of the bilateral High-Level Joint Task Force of Investments. They acknowledged that the UAE became the fourth largest investor in India in 2022-2023, compared to the seventh in 2021-2022.
They appreciated the plan of the Abu Dhabi Investment Authority (ADIA) to set up a presence in Gujarat International Finance Tec-City (GIFT City), a financial-free zone in Gujarat, in the next few months. This will further facilitate investment opportunities for the UAE in India, they said.
The two leaders also held wide-ranging discussions covering various dimensions of the bilateral partnership, including trade and investment, fintech, energy, renewables, climate action, higher education and people-to-people ties. The discussions also covered regional and global issues.
A separate Joint Statement on Climate Change was also issued. The leaders noted the significant global roles played by both countries in 2023, with India’s presidency of the G20 and the UAE’s presidency of COP28. The UAE side appreciated the hosting of the Voice of Global South Summit by India in January 2023. The Indian side also commended the UAE for its instrumental role in promoting the Global South’s interests at COP28 and making COP28 a “COP of action.” Both sides also looked forward to further cooperation in plurilateral fora such as I2U2 and the UAE-France-India trilateral cooperation initiative. They noted that such platforms provide greater opportunities for both countries to elevate the partnership to new heights.
This was the fifth visit of Prime Minister Modi to the UAE in the last eight years. He last visited the UAE in June 2022 when he visited Abu Dhabi to meet Sheikh Mohamed bin Zayed Al Nahyan to convey his greetings to the Sheikh on assuming the presidency of the UAE.
In 2015, Modi became the first Prime Minister of India to visit the UAE in 34 years. This visit was followed by the visit of Sheikh Mohamed bin Zayed Al Nahyan to India in 2016, then in 2017, when he was the Chief Guest at India’s Republic Day celebrations. Moreover, the India-UAE relationship was formally elevated to a Comprehensive Strategic Partnership during the visit of the UAE President to India in 2017.
– global bihari bureau
