According to HE Dr. Thani bin Ahmed Al Zeyoudi, the UAE’s Minister of State for Foreign Trade, the UAE is in early talks with India on trading non-oil goods with Indian rupees. Last year, the UAE inked a comprehensive free trade deal with India, which, together with China, is one of the most important trading partners for Gulf Arab oil and gas exporters, the majority of whose currencies are pegged to the US dollar.
Other nations, notably China, have addressed the topic of settling non-oil trade payments in local currencies, according to the minister, but conversations had not progressed. Although the vast bulk of Gulf commerce is handled in US dollars, nations such as India and China are increasingly looking to pay in local currencies for a variety of reasons, including reduced transaction costs, according to Reuters.
The UAE-India trade agreement intends to boost bilateral non-oil commerce to 367 billion AED ($100 billion) over the next five years.
“We have to be realistic; we are planning our budgets based on (US) dollars so it is not an overnight movement,” the misnter said. “There is a discussion, not only with India, but we are managing it in a way that does not conflict with the overall interests of the nation.” The minister also stated that any progress in negotiations must make sense for all parties concerned, and that the UAE must offer value to the expansion of the Gulf Arab state’s economy.
According to the latest reports, the UAE’s commercial contacts are increasingly focused on Asia, while its key security and investment links are in the West, where Gulf Arab governments have long-standing strategic alliances, particularly with the US. Following bilateral trade agreements with India and Indonesia, the minister stated that an agreement with Cambodia was likely to be completed in the first quarter.
