UAE, India Firms Shift from Dollar: Cross-Border Settlements

07 Jun, 2024

UAE, India Firms Shift from Dollar Cross-Border Settlements

In a significant move towards de-dollarization, India and the United Arab Emirates have forged an agreement to shift away from the dollar and settle their bilateral trade in rupees.

The collaboration marks a milestone in fostering economic cooperation between the two nations. According to the Reserve Bank of India (RBI), the integration of India's Unified Payments Interface (UPI) with UAE's Instant Payment Platform (IPP) will pave the way for smoother transactions and payments.

India's move away from the dollar extends beyond its bilateral ties with the UAE. With increasing oil deals with Russia, India has been exploring frameworks for settling global trade in rupees. This diversification of payment currencies not only mitigates risks associated with dollar dependence but also enhances India's resilience in the face of geopolitical uncertainties.

As bilateral trade flourishes between India and the UAE, both countries aspire to elevate non-petroleum trade to $100 billion by 2030. Leveraging local currency settlements not only reduces transaction costs but also strengthens economic ties, positioning both nations favorably in the global trade landscape.