India and the United Arab Emirates (UAE) have signed cross-border transaction agreements to facilitate trade between the two countries.
The agreements, signed by the Reserve Bank of India (RBI) and the Central Bank of the UAE (CBUAE), aim to boost economic ties and promote bilateral trade.
The agreement between India and the UAE to bolster the use of the Indian rupee and the UAE dirham in bilateral trade is expected to have several positive implications. By enabling exporters and importers to make payments in local currencies, the agreement will reduce the reliance on third-party currencies and associated transaction costs. The increased demand for these currencies could potentially lead to a rise in their value, according to RBI.
The agreement will also benefit Indian citizens residing in the UAE by reducing the cost of remittance transactions and expediting the process. The UAE is home to a significant number of Indian expatriates, with approximately 2.3 million Indians making up about 30 percent of the country's population.
The RBI has outlined plans to establish a connection between the payment systems of both countries, linking India's UPI system with Dubai's instant payment platform. Additionally, the integration of India's RuPay card with the UAESwitch card system will further streamline financial transactions between the two countries.
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