NEW DELHI: India and the United Arab Emirates have started settling bilateral trade in their local currencies with India’s top refiner making payments in rupees for the purchase of a million barrels of oil from the Middle Eastern nation.
Indian Oil Corp made payments to Abu Dhabi National Oil Company (ADNOC), according to a statement issued by the Indian embassy in UAE.
The transaction comes after one involving the sale of 25 kg gold from a UAE gold exporter to a buyer in India at about 128.4 million rupees ($1.54 million).
India in July signed an agreement with the UAE allowing it to settle trade in rupees instead of dollars, boosting India’s efforts to cut transaction costs by eliminating dollar conversions.
During a visit by Indian Prime Minister Narendra Modi to the UAE, the two countries also agreed to set up a real-time payment link to facilitate easier cross-border money transfers.
The two agreements will enable “seamless cross-border transactions and payments, and foster greater economic cooperation”, said a statement from the Reserve Bank of India.
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, currently pays for UAE oil in dollars.
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.
