Rupee-UAE dirham trade mechanism may launch during Modi visit Saturday -sources | Reuters
India and the United Arab Emirates may announce the start of a rupee-dirham payment mechanism to settle bilateral trade during Prime Minister Narendra Modi's visit to Abu Dhabi on Saturday, industry and government sources said.
Sources said on Friday that India would use the mechanism to pay for oil as well as other imports from the UAE, its fourth largest oil supplier in the year to March.
At present India, the world's third-biggest oil importer and consumer and whose central bank last year announced a framework for settling global trade in rupees, pays for UAE oil in dollars.
Apart from creating an alternate payment mechanism, settlement in rupees would also cut India's transaction costs by eliminating dollar conversions.
Bilateral trade between India and UAE was $84.5 billion in 2022/23.
India is keen to push similar local currency arrangements with other countries, as it looks to boost exports amid slowing global trade.
An official aware of the details said India could make its first rupee payment for UAE oil to Abu Dhabi National Oil Co (ADNOC).
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