India and the United Arab Emirates (UAE) have taken a significant step towards enhancing their economic cooperation by signing agreements that facilitate trade settlement in their respective national currencies. These Memoranda of Understanding (MoUs) aim to streamline cross-border transactions and payments between the two nations, fostering deeper economic collaboration.
During a visit to Abu Dhabi, Prime Minister Narendra Modi and Reserve Bank of India Governor Shaktikanta Das signed these agreements in the presence of UAE President Sheikh Mohammed Bin Zayed Al Nahyan. The pacts establish a framework for rupee-dirham transactions, interlink payment systems, and enable mutual acceptance of domestic cards through the RuPay and UAESWITCH card switches.
These initiatives align with Prime Minister Modi's vision to elevate the global status of the Indian rupee and position India as an attractive manufacturing alternative to China. While progress in achieving this goal has been gradual, these recent developments are expected to facilitate greater financial flows between India and the UAE.
Beyond economic matters, Prime Minister Modi's visit to Abu Dhabi also witnessed strengthened cooperation in various sectors. Alongside the trade settlement agreements, educational authorities from both countries signed an MoU to establish an Indian Institute of Technology Delhi campus in Abu Dhabi, promoting educational collaboration and knowledge exchange.
The UAE holds a special place in India's engagement strategy with West Asian states, and the bilateral relationship has seen significant progress in recent years. With approximately 3.5 million Indian expatriates residing in the UAE, accounting for around 30% of the country's total population, the signing of the Comprehensive Economic Partnership Agreement (CEPA) in February 2022 further boosted bilateral trade.
During his visit, Prime Minister Modi engaged in fruitful discussions with Abu Dhabi Crown Prince Sheikh Khaled Mohamed bin Zayed Al Nahyan and UAE President Sheikh Mohamed bin Zayed Al Nahyan at the Qasr Al Watan presidential palace. The meetings aimed to deepen ties and explore opportunities for cooperation in areas such as trade, energy, climate action, and security. These efforts signify the commitment of both nations to forging a stronger and more prosperous partnership.
