By Aniket Gupta
India and the United Arab Emirates have initiated bilateral trade using their respective local currencies. The first of such transactions was the sale of 25 kg gold by a UAE bullion exporter to an Indian buyer. The deal was worth about Rs.128.4 million ($1.54 million).
The second such bilateral transaction was in oil. Indian Oil Corporation (IOC), the country’s leading refiner, completed a rupee payment for the acquisition of one million barrels of oil from Abu Dhabi National Oil Company (ADNOC).
These transactions have been completed as part of an agreement India and the UAE signed in July 2023, which authorizes trade settlements to happen in rupees rather than US dollars. The agreement is designed to boost transaction efficiency and cut the currency conversion expense.
During the fiscal year 2022-23, two-way trade between India and the UAE reached a total of $84.5 billion. India aims to replicate similar local currency transaction deals with other nations as a means to enhance exports amidst a lackluster global trade landscape.
Currently, 1 US dollar is equivalent to 83.23 Indian rupees.