Saudi Arabia Finance Minister Mohammed Al-Jadaan also added, “I don’t think we are waving away or ruling out any discussion that will help improve the trade around the world."
Saudi Arabia's finance minister on January 17 said that the kingdom is open to discussions about trade in currencies other than the US dollar.
“There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal,” Mohammed Al-Jadaan told Bloomberg TV on Tuesday in an interview in the ongoing World Economic Forum 2023 at Davos.
The FM's statement holds significance in the light of India-UAE ties too as both countries have earlier discussed the possibility of starting a rupee-riyal trade as part of efforts to boost economic ties. India and the UAE had already signed a free trade agreement (FTA) in February 2022 to give a fillip to bilateral trade and economic ties.
India, Asia's third-largest economy, has put in place a mechanism to settle international trade transactions in Indian rupees with an emphasis on exports to boost global trade and respond to growing interest in the use of the rupee for trading purposes.
Trade Minister Piyush Goyal has earlier emphasised the need to diversify ties with UAE via trade. In his meeting with Saudi trade minister Majid bin Abdullah Al-Kassabi last year, he noted, "Discussed ways to attract greater investment and further diversify bilateral trade to boost economic ties between India & Saudi Arabia.
Moreover, India's trade balance with Saudi Arabia is tilted in favour of the Kingdom, a key oil supplier to the world's third-biggest crude importer and consumer.
In April-July, the first four months of this fiscal year to March 31, 2023, India's imports from Saudi Arabia rose by 93% to $15.5 billion while exports were up by about 22% to $3.5 billion, according to the Indian commerce ministry data.
Meanwhile, the Reserve Bank of India (RBI) approval for banks to open special Vostro accounts to invest the surplus balance in Indian government securities also helps popularise the new arrangement. The decision, RBI had said, came in order to promote the growth of global trade with emphasis on exports from India and to support the increasing interest of the global trading community in Indian rupees.
Further, in terms of rupee-riyal trade, India and Saudi Arabia have already held discussions on the feasibility of institutionalising the same, and introducing of UPI and Rupay cards in the kingdom.
Additionally, Al-Jadaan also added, “I don’t think we are waving away or ruling out any discussion that will help improve the trade around the world."
