Read all the Latest News, Trending News, Cricket News, Bollywood News, The report quoted senior official saying that “a bilateral beginning has been made with these countries to trade in our own currencies and over a period of time the volumes will pick up.” Must Read: Eight countries open 50 special rupee vostro accounts in 6 months to trade in INR The 18 countries that have been allowed to trade in Indian rupees are – Russia, Singapore, Sri Lanka, Botswana, Fiji, Germany, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Seychelles, Tanzania, Uganda and the United Kingdom. Last week, India’s Minister of State for Finance Bhagwat Karad said RBI had granted approval to “domestic and foreign AD (Authorised Dealer) banks in 60 cases for opening SRVAs of banks from 18 nations” for settling payments in Indian rupees. Once effective, trade in Rupee-Dirham will be conducted through vostro accounts of banks of the two countries.ġ8 countries agree to trade in Indian rupee If they start trading in local currencies, they would be able to save on account of foreign currency conversion fees and facilitate smoother flow of capital.Īlso Read: Indian rupee could be the new dollar, says ‘Doctor Doom’ Nouriel RoubiniĪlso, the transaction costs for exporters and importers will be reduced.
The UAE and India currently use the US dollar to settle trade payments.
How will trade Rupee-Dirham help India and UAE? Last year, India had prepared a concept paper on Rupee-Dirham trade and shared it with the UAE.Īlso, India and UAE also signed a free trade agreement (FTA) that started in May last year. India’s Reserve Bank of India (RBI) and UAE’s Central Bank officials have already done the groundwork for the introduction of bilateral trade in local currencies.
Officials of central bank and finance department of both the countries have been working together since last year to put in place a Rupee-Dirham payment mechanism. Late last month, top Indian banking and finance officials visited Abu Dhabi to discuss the details of the deal. In financial year 2022, India-UAE bilateral trade stood at about $73 billion. In the first half of the ongoing financial year, bilateral trade between India and UAE stood at $44 billion. Must Read: Rupee closer to replacing dollar as 18 nations agree to trade in INRįor the unversed, UAE is India’s third largest trading partner after the US and China.
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