India steps up non-dollar trade talks with UAE

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By Our Special Correspondent

New Delhi, October 11: Rupee has been battered amid the global currency rout in the wake of the Russian invasion of Ukraine and the consequent global inflation sinking the world economy.

There has also been a growing debate about the cost of globalization in several countries, with the scale of economy giving undue advantages to some of the countries such as the US and China. Dollar is becoming far stronger to push the cost of imports higher for the developing countries, including India.

The 10th meeting of the UAE-India High Level Joint Task Force on Investments, which took place in Mumbai on Tuesday, saw India calling for a mechanism for trade in the national currencies of the two countries. The meeting co-chaired by Piyush Goyal, Minister of Commerce & Industry, and Sheikh Hamed bin Zayed Al Nahyan, Member of the Executive Council of the Emirate of Abu Dhabi.

“An important area discussed was the creation of a mechanism for carrying out bilateral trade in national currencies. Referring to the ongoing discussions between Reserve Bank of India and Central Bank of the United Arab Emirates on Unified Payment Interface (UPI) as a common digital payments platform, both sides agreed to continue discussions,” stated the Ministry of Commerce in a media statement.

It may be noted that India has a rupee-denominated trade with Russia and Iran, while there is a spirited push by the Narendra Modi government for delinking bilateral trades with some of the key economic partners from dollars. Major global currencies have sunk against dollar in the last few months. Even while the crude oil has come down to about $80 per barrel from the high of $130 per barrel, most of the gains stands negated due to sharp depreciation of rupee. India is also a major importer of gold, and electronic goods.

The India-UAE Joint Task Force was established in 2013 to promote trade, investment and economic ties. This was the first meeting of the Joint Task Force since the signing of the India-UAE Comprehensive Economic Partnership Agreement (CEPA) and unveiling of the Joint UAE-India Vision Statement in February 2022 during the virtual summit between Narendra Modi, Prime Minister of India and Sheikh Mohamed bin Zayed Al Nahyan, President of the UAE.

The two countries are also carrying out negotiations for the Bilateral Investment Treaty for which 12 rounds of negotiations have been held, while there is a push for an early conclusion. Discussions also took place on ways of enhancing bilateral investments in key sectors like food security, manufacturing, infrastructure, energy and technology. In this context, it was agreed that the concerned authorities in both countries will explore establishment of efficient and integrated ‘Single Window Solutions and Virtual Trade Corridors’ to reduce costs and time involved in trade and investment related procedures.

India has set up a ‘UAE Plus Desk’ in 2018 and established a fast track mechanism in 2019 to identify, resolve and expedite issues faced by the UAE companies and investors in India. “It was also agreed that a similar India Fast Track Mechanism would be set up in the UAE immediately to resolve issues pertaining to the Indian investors in the UAE, and to assist Indian companies in market entry and expansion,” added the Ministry.

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