India, UAE sign MoUs to promote use of local currencies for cross-border transactions

New Delhi: Dubai's iconic Burj Khalifa illuminated in the Indian tricolour, displaying a picture of Prime Minister Narendra Modi and the message "Welcome Honourable Prime Minister Narendra Modi" as he arrived in Abu Dhabi on Saturday for talks with top leaders of the United Arab Emirates (UAE).

Modi's visit to Abu Dhabi followed his two-day trip to France. Upon arrival, he was received by Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi. Subsequently, the PM held delegation-level discussions and one-on-one talks with Sheikh Mohamed bin Zayed Al Nahyan, the President of the UAE and the ruler of Abu Dhabi.

During their extensive discussions, the two leaders covered various aspects of the bilateral partnership, including trade, investment, fintech, energy, renewables, climate action, higher education, and people-to-people ties. The talks also encompassed regional and global issues, emphasising their joint commitment to combat extremism and terrorism in all forms, both regionally and internationally. They agreed to deepen bilateral cooperation in the fight against terrorism, terrorist financing, and extremism, while promoting peace, moderation, coexistence, and tolerance.

The PM and UAE leaders witnessed the signing of three significant documents: a Memorandum of Understanding (MoU) between RBI and UAE Central Bank to establish a framework for promoting the use of local currencies (INR-AED) in cross-border transactions; and an MoU between RBI and UAE Central Bank for bilateral cooperation on interlinking payment and messaging systems.
Modi also engaged in discussions with Sultan Al Jaber, the president-designate of the UN climate conference, focusing on sustainable development and bilateral energy cooperation. Sultan Al Jaber, who is also the Group CEO of Abu Dhabi National Oil Company, briefed the PM on the UAE's approach to the upcoming COP-28 meeting on climate change. Modi highlighted India's efforts and initiatives in addressing climate change, such as the International Solar Alliance, Coalition for Disaster Resilient Infrastructure, International Year of Millets, and Mission Lifestyle for Environment (LiFE). Energy cooperation between India and the UAE was also a topic of discussion.

This visit marked Modi's fifth visit to the UAE in the past eight years, demonstrating the strength of the India-UAE relationship. Notably, Modi's visit in 2015 was the first by an Indian Prime Minister to the UAE in 34 years. The relationship was further strengthened with visits from Sheikh Mohamed bin Zayed Al Nahyan to India in 2016 and 2017, the latter being as the chief guest at India's Republic Day celebrations. India-UAE trade has significantly grown, reaching $85 billion in 2022, with the UAE becoming India's third-largest trading partner for the year. The bilateral trade relationship has flourished since the signing of the Comprehensive Economic Partnership Agreement (CEPA) in February 2022, resulting in a 15 per cent increase in trade.

In the coming months, Abu Dhabi Investment Authority (ADIA) will establish a presence in Gujarat International Finance Tec-City (GIFT City), enhancing investment opportunities for the UAE in India.

Furthermore, Sheikh Mohammad bin Al Nahyan is set to visit New Delhi for the G-20 Leaders' Summit on September 9-10, 2023.