After signing the free trade agreement
six months ago India and United Arab Emirates have moved to the next stage of
exploring the possibility of having the EXIM trade between them using domestic
currencies bypassing the US dollars
Both the countries are in talks for a
Rupee-Dirham-denominated bilateral trade, said Sunjay Sudhir, Indian Ambassador to UAE.
The arrangement if concluded will be
beneficial to both the countries he was quoted by a news agency. The formal
talks in this regard commenced two months ago.
India has shared a concept paper with UAE spelling out
the modalities. The
Central Banks of both countries are discussing. The objective is to reduce the
transaction cost," the Indian Ambassador to UAE said.
This development followed the Reserve Bank
of India's (RBI) announcement -- a mechanism to settle payments for
international trade in rupees, especially for India's exports.
It is widely believed if the mechanism
fructifies then it may go a long way in internationalizing the Indian currency
rupee in the long run.