The Reserve Bank of India and Central Bank of the UAE are in active dialogue for a Rupee-Dirham trade mechanism…reports Asian Lite News
India and the UAE on Monday agreed to raise bilateral trade sans petroleum products, to $100 billion by 2030. This was informed by India’s Commerce Minister Piyush Goyal after his meeting with UAE’s foreign trade minister Dr. Thani bin Ahmed Al Zeyoudi during the first meeting of the Joint Committee (JC) of the India-UAE Comprehensive Economic Partnership Agreement (CEPA).
Initial figures from the UAE Ministry of Economy indicate that from May 2022 to April 2023, the first 12 months of the CEPA, bilateral non-oil trade reached a value of US$50.5 billion, a 5.8 percent increase on the same period from the previous year.
Dr. Thani Al Zeyoudi heralded the progress of bilateral relations over the last year. “Since the implementation of the Comprehensive Economic Partnership Agreement between the UAE and India, we have witnessed real momentum in bilateral non-oil trade, which is keeping us on course to reach our target of US$100 billion by 2030.”
“But this was always more than just a trade deal, and the increased investment flows, joint ventures and deeper market penetration underline the real potential of the agreement. Our visit this week was both a celebration of the achievements to date and an opportunity to strengthen what is becoming a genuine partnership for growth,” he added.
Piyush Goyal, Indian Minister of Commerce and Industry, affirmed that the UAE-India CEPA played a prominent role in consolidating economic and trade relations, driving further growth and prosperity and creating new opportunities and enablers for the private sector. He pointed out that the agreement achieved distinguished economic results that enhanced trade exchanges between the two friendly countries.
The Indian minister also reviewed a number of economic initiatives, which will enhance the prospects for investment cooperation between India and the UAE by taking advantage of the promising investment opportunities in the markets of the two countries.
Trading in local currencies
The two countries are also discussing possibilities of conducting bilateral trade in local currencies under the India-UAE CEPA, Goyal informed further.
Central banks of both India and UAE are actively in talks for India-UAE bilateral trade in local currencies under CEPA, he said, after the first meeting of CEPA.
Goyal said that the RBI and UAE central bank are in active discussions for rupee-dirham trade and the Finance Ministry supports the move.
“If we recall in March 2022 when we got talking about how we can make business more attractive between the two countries how we can help our business persons reduce operating costs and transaction costs. Dialogue of the Rupee-Dirham trade was actually sown in that meeting. It’s just about a year since then, but both countries have made significant progress.”
He, however, did not mention any timeline on the finalization of the Rupee-Dirham-based trade mechanism.
“I can only say this that it’s progressing at a very fast pace. l and you can imagine good outcomes very soon,” Goyal added.
Met biz leaders
Following the witnessing of the UAE-India Joint Committee, Al Zeyoudi and Piyush Goyal addressed a meeting of business leaders from both the UAE and India, during which they gained insights into the private sector’s utilisation of the CEPA to date. The meeting was designed to understand the business community’s experiences of the deal since implementation as well as explore new, high-potential opportunities.
Coming into force on 1st May 2022, the UAE-India CEPA was the UAE’s first-ever bilateral trade deal and a cornerstone of its new foreign trade agenda. The agreement eliminated or reduced tariffs on more than 80 percent of product lines, created new platforms for SME collaboration and promoted mutual investment flows, particularly into priority sectors. Following the deal with India, the UAE has now concluded a further four CEPAs with Israel, Indonesia, Türkiye and Cambodia.
Al Zeyoudi was joined in India by Dr. Abdulnasser Alshaali, UAE Ambassador to India; Abdulla Al Shamsi, Assistant Under-Secretary in the Industrial Development Sector, Ministry of Industry and Advanced Technology; alongside senior private sector stakeholders from companies including Brouge, KEZAD Group, DP World, Al Serkal Group, Al Rawabi, Ail Ain Farms, Al Ghurair Group, DMCC and Emirates NBD.
Both the ministers addressed a joint press conference on successfully concluding the first meeting of the Joint Committee. They also participated in a B2B event organized by the Department of Commerce in partnership with the Confederation of Indian Industry (CII).
“The initial gains have already started accruing from the Agreement with bilateral trade between India and the UAE growing at around 16.5 per cent and touching an all-time high of around USD 84.84 billion during FY 2022-23,” Goyal emphasised during the meeting.
Piyush Goyal also said that India’s exports to the UAE had witnessed a 12 per cent growth and reached USD 31.6 billion in 2022-2023.