India-UAE to formalise rupee-dirham trade; to double non-crude trade to $100 bn

The Reserve Bank of India (RBI) and the Central Bank of the UAE will sign an agreement to facilitate bilateral trade in Rupee and Dirham soon, Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, UAE, said.

“Both central banks and the relevant authorities have been in discussions. We reached a level where it has been concluded. The details will be announced by the Central Banks after signing the agreement. It shows how flexible, how agile this (bilateral) relation is”, Zeyoudi said at a joint press conference along with Commerce Minister Piyush Goyal in Delhi on June 12. 

Piyush Goyal said the idea of Rupee-Dirham trade had come up in an informal meeting a year ago and India and UAE have made significant progress since then. “The RBI and the Central Bank of UAE have been in very active dialogue, the ministry of finance is very supportive and handling the entire issue. We will await the final outcome in the coming months”, Goyal said.

On timelines, Goyal said the countries do not have any timelines, but it is progressing at a very fast pace. “Currently we are looking at trading between the two countries. Once that gets operationalised, we will see if there is any potential to expand that further”, he added.

According to Goyal, the RBI and the Central Bank of UAE have been in very active dialogue not only on rupee dirham trade but also on other digital technologies (payment tools) becoming a part of the UAE-India framework in the coming months.

The joint press conference was organised after the first meeting of the joint committee meeting between the two countries under the India-UEA Comprehensive Economic Partnership Agreement (CEPA) that was operationalised a year ago. The UAE minister said that the UAE-India Joint Committee was created to review and refine the terms of the CEPA and ensure it continues to work for the benefit of both nations.

Incidentally, in the first 12 months of the CEPA, the bilateral non-oil trade had reached $50.5 billion. The two countries have set a target to double the non-petroleum bilateral trade and touch $100 billion by 2030.