Use of the Indian Rupee and the UAE Dirham in Bilateral Trade
Agreement on the Use of the Indian Rupee and the United Arab Emirates Dirham in Trade: 10 Benefits
1. Currency Stability
The trade agreement eliminates the effect of currency fluctuations, protecting exporters from financial losses that could otherwise be incurred as a result of fluctuations in the value of the USD
2. Trade Growth
Trade settlement simplification promotes bilateral trade growth, as evidenced by India’s recent $85 billion in trade volume with the UAE.
3. Time and Money Savings
Businesses and consumers alike can gain from the agreement since it encourages the use of local currencies in cross-border transactions, which decreases transaction costs and speeds up settlement times.
4. facilitates remittances
The arrangement facilitates remittances from Indian expats in the UAE, allowing for quicker and cheaper transfers of money to loved ones back in India.
5. UPI-IPP interaction
Safe and fast international money transfers are made possible by the proposed connection between India’s Unified Payments Interface (UPI) and the Instant Payment Platform (IPP) in the United Arab Emirates.
6. domestic cards are accepted
When domestic cards are accepted in both nations, it streamlines the buying and selling process for consumers and business owners alike.
7. Local Currency Settlement
The establishment of this mechanism paves the stage for the growth of an INR-AED foreign exchange market by allowing exporters and importers to deal in their own currencies.
8. Variety of Financial Transactions Covered
The MOU promotes all-around economic cooperation by covering a wide range of transactions, from current to permissible capital account activities.
9. Fortifying Diplomatic Ties
The trade agreement strengthens the cooperative connection between India and the UAE beyond the economic gains. This is because it increases diplomatic relationships and cultural exchanges between the two countries.
10. Potential for Future Growth
The provisions of the accord create a more stable and predictable trade environment, which has immediate benefits and lays the framework for sustainable economic progress.