Prime Minister Narendra Modi recently announced that India and the United Arab Emirates (UAE) have agreed to start local currency trade settlement. This historic agreement occurred during talks with UAE President Sheikh Mohamed bin Zayed Al Nahyan in Abu Dhabi. Consequently, this move aims to boost bilateral trade and investments significantly. PM Modi expressed strong hope that trade will soon surpass the $100 billion mark, rising from its current standing of $85 billion.
Expanding the Comprehensive Strategic Partnership
The Ministry of External Affairs (MEA) noted that the partnership between these two nations has been steadily strengthening. Furthermore, the Prime Minister’s visit identifies new ways to advance cooperation across various domains. These sectors include energy, education, healthcare, food security, and fintech. In addition, both leaders discussed global issues within the context of the UAE’s COP-28 Presidency and India’s G-20 Presidency. Because the UAE is a “special invitee” to the G-20, this collaboration remains a high priority for both governments.
Strengthening Global Pillars and Security
PM Modi arrived in the UAE following a significant visit to France. During his time there, he held bilateral discussions with President Emmanuel Macron. Specifically, the two countries drew a roadmap for ties based on three essential pillars. These pillars include partnership for security and sovereignty, partnership for the planet, and partnership for the people. By implementing local currency trade settlement, India and its partners aim to create a more resilient and sovereign financial architecture.
Impact on Fintech and Food Security
The agreement on local currencies also opens new doors for the fintech sector. By bypassing third-party currencies, businesses can reduce transaction costs and improve settlement speeds. Moreover, the focus on food security and energy ensures that the bilateral relationship addresses the most pressing needs of both populations. Thus, the move toward local currency trade settlement acts as a catalyst for deeper economic integration and mutual prosperity.
Courtesy: indianexpress.com
