MC EXCLUSIVE India–EU FTA makes uncommon reference to cooperation on CBDCs

European Council President Antonio Costa, European Commission President Ursula von der Leyen and Indian Prime Minister Narendra Modi. (REUTERS/File)

The India–European Union free trade agreement (FTA) includes an explicit reference to cooperation on Central Bank Digital Currencies (CBDCs), at a time when New Delhi is planning a fuller rollout of its digital rupee.

Under Annex 8-C (Financial Services), Article 8-C.13 on “Cooperation and Exchange of Views on Financial Services including Financial Technology (FinTech)” states that the two sides may collaborate in areas such as “Sup Tech, Reg Tech, Central Bank Digital Currency (CBDC) and other areas of new and emerging technologies.”

The text of the India–European Union free trade agreement was released on February 27.

The inclusion is notable because CBDCs are still evolving globally and rarely feature directly in trade agreements.

India’s digital rupee, issued by the Reserve Bank of India, is currently in the pilot phase, with both retail and wholesale segments under testing.

Moneycontrol had earlier reported that the full rollout will take into account global developments and cross-border use cases.

Against that backdrop, the mention of cooperating on CBDCs signals further engagement between India and the European Union on digital currency regulation, standards and technological development.

The European Central Bank is also said to be advancing work on a digital euro.

The Financial Services annex also states encouraging cooperation on electronic payments and that both sides shall endeavour to enable real-time cross-border remittances and merchant payments by promoting interoperability of payment infrastructures.