New Delhi: India and the United Arab Emirates (UAE) have strengthened their bilateral ties by signing key agreements during Prime Minister Narendra Modi’s visit to Abu Dhabi.
The agreements focus on trade settlement in national currencies and establishing a real-time link for cross-border transactions. A memorandum of understanding (MoU) was also signed to establish a campus of the prestigious Indian Institute of Technology (IIT)-Delhi in Abu Dhabi. These initiatives aim to enhance cooperation between the two nations in trade, energy, climate action, and education.
The UAE holds a special significance in India’s engagement with West Asian countries, with a large Indian expatriate population of 3.5 million residing there. The Comprehensive Economic Partnership Agreement (CEPA) signed in February 2022 further boosted bilateral trade.
Prime Minister Modi was warmly received by Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan upon his arrival in Abu Dhabi. Subsequently, he discussed with UAE President Sheikh Mohamed bin Zayed Al Nahyan, where two MoUs were signed. The first MoU between the Reserve Bank of India (RBI) and the Central Bank of UAE establishes a framework for using national currencies in cross-border transactions, promoting using the rupee and dirham. It will facilitate easier payment processes for exporters, importers, and individuals, reducing transaction costs and settlement time.
The second MoU signed between India’s education ministry and Abu Dhabi authorities paves the way for setting up a new campus of IIT-Delhi. This collaboration in higher education aims to provide quality technical education to Indian students in Abu Dhabi.
According to Prime Minister Modi, the agreements between the two central banks are deemed essential for strengthening economic collaboration and simplifying international financial interactions. Utilizing local currencies, the rupee and dirham will promote investments, remittances, and trade between India and the UAE. Furthermore, the cooperation in linking payment systems, such as India’s Unified Payments Interface (UPI) and the UAE’s Instant Payment Platform (IPP), will enable fast, secure, and cost-effective cross-border transfers. The mutual acceptance of domestic cards and processing of card transactions will also be facilitated by linking card switches.
This is a very important aspect of India-UAE cooperation. It paves the way for enhanced economic collaboration and will make international financial interactions simpler. https://t.co/nuoQbUIFq6
— Narendra Modi (@narendramodi) July 15, 2023
Bilateral trade between India and the UAE reached $84.5 billion in the fiscal year 2022-23. The UAE, being a significant importer of food, has committed $2 billion to develop food parks in India. Both countries aim to increase non-petroleum trade to $100 billion by 2030. Climate change mitigation was also on the agenda during Prime Minister Modi’s visit, as he met with Sultan Al Jaber, president-designate of COP28 and group CEO of Abu Dhabi National Oil Company (ADNOC). Discussions centered around sustainable development and India’s commitment to the cause, particularly its emphasis on Mission LiFE.
Foreign Secretary Vinay Kwatra highlighted the substantial growth in the trade and economic partnership between India and the UAE since the signing of the CEPA. He emphasized that the recent agreements pave the way for increased strategic economic convergence between the two countries and create opportunities for similar arrangements with other nations in the region and beyond.
Prime Minister Modi’s visit to the UAE reinforces the strong bonds between India and the UAE, strengthening cooperation in various sectors and opening new avenues for collaboration.
