Signing of currency swap agreement between India and the UAE will help in boosting trade and investments between the two countries, a commerce and industry ministry official said Wednesday. With this arrangement, the two countries allow trading in their own currency and payments to import and export trade at pre-determined exchange rate without bringing in a third benchmark currency like the US dollar, the official added.
The idea for the agreement was first mooted by Commerce and Industry Minister Suresh Prabhu and it was discussed at length in the sixth meeting of the UAE – India High Level Joint Task Force on Investments held in Mumbai in October. The commerce ministry was continuously pursuing the matter with the UAE authorities.
The ministry has also established a special UAE desk to facilitate investments and resolve issues relating to UAE Investments in India. The pact will further boost bilateral trade and investments between the countries, the official added. The bilateral trade stood at USD 50 billion in 2017-18. India has attracted USD one billion in FDI (foreign direct investment) during that fiscal.