India-UAE central banks in active dialogue for rupee trade under CEPA: Piyush Goyal

Goyal was speaking after the first meeting of the joint committee of India-UAE Comprehensive Economic Partnership Agreement (CEPA).

India and UAE central banks are in active talks for India-UAE bilateral trade in local currencies under CEPA, which are progressing at a fast pace, commerce minister Piyush Goyal said on June 12.

Goyal was speaking after the first meeting of the joint committee of India-UAE Comprehensive Economic Partnership Agreement (CEPA).

"RBI, UAE central bank are in active dialogue for rupee-dirham trade. Trade talks in rupee-dirham are progressing at a fast pace. India's finance ministry is supportive of the discussion," he said.

Goyal said that in March 2022 the two countries got talking about how we can make business attractive and help to reduce operating costs and transaction costs.

"Dialogue of Rupee-Dirham trade was actually sown in that meeting. It's just about a year since then, but both countries have made significant progress. The Reserve Bank of India and the Central Bank of UAE have been a very active dialogue.

The Ministry of Finance is very supportive and handling the entire issue and I am sure that given the high level engagement of both sides given the active pursuit of working together, not only on a rupee-Dirham trade but also other digital technologies will become a part of the UAE-India framework. In the coming months we will await for final outcomes very soon," he said.

India is also discussing the UPI platform being made available to UAE businesses for payments.

"We are taking the idea of UPI forward for UAE companies for bilateral trade," Goyal said.

India-UAE CEPA came into effect from May 1, 2022.  Indian exports to UAE stood  at $31.6bn in FY23 while the overall bilateral trade was at $84.8bn in FY23.

Goyal said that in view of the large imports of oil from UAE, the two countries are now aiming at non-oil trade of $100 bn by 2030.

"Bilateral trade between India-UAE has seen significant increase in last 1 year. There is significant increase in trade due to oil imports. We are aiming at $100bn bilateral trade target by 2030 of non-oil items from current $48bn," he said.

The two countries will be setting up new committees to look at expansion of services trade, customs facilitation, investment, rules of origin, tariff rate quota, etc.

"Looking at services sector to expand the bilateral trade. We will set up new India-UAE CEPA council to facilitate inclusive trade with focus on MSME, startups. Services trade will help achieve the ambitious trade target between the two countries," he said.

A large portion of the bilateral trade consists of oil imports by India.

"We would like to have UAE as our principal supplier of petroleum products. India has asked UAE to increase sourcing of refined petroleum products from India. Third countries' low quality petroleum products could be refined by Indian refineries," he said.

UAE is also the second largest supplier of gold to India. Goyal said that in the current year the government expects full utilisation of gold imports under CEPA.

"Have worked on ironing out initial difficulties that businesses faced. India can be a large exporter of textile, footwear, furnishings to UAE. B2B collaboration between India-UAE needs to be widespread to include MSMEs, women entrepreneurs, startups," he said.

Abu Dhabi investment authority will also soon set up in GIFT City, Gujarat to focus on ironing out issues and enhancing investments in India, the minister said.