India and the UAE have started settling bilateral trade in their local currencies, with India’s top refiner making a payment in rupees for the purchase of a million barrels of oil from the Middle Eastern nation, the Indian government said on Monday.
Indian Oil Corp made the payment to ADNOC for the purchase, according to a statement issued by the Indian embassy in the UAE.
The transaction follows another involving the sale of 25 kg of gold from a UAE gold exporter to a buyer in India, amounting to about 128.4 million rupees ($1.54 million).
In July, India signed an agreement with the UAE that allows it to settle trade in rupees instead of dollars, boosting India’s efforts to cut transaction costs by eliminating the need for 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.
Bilateral trade between India and the UAE was $84.5 billion in 2022/23.
India is keen to establish similar local currency arrangements with other countries as it seeks to boost exports amid slowing global trade.
