UAE-India currency agreements to boost trade, benefit Indian tourists

Indian businessmen and professionals in the UAE welcomed the UAE-India agreements to promote bilateral currencies in the trade as well as a host of other initiatives taken to facilitate tourists and residents.

During the Indian Prime Minister Narendra Modi’s visit on Saturday, the two countries signed agreements to settle trade in local currencies, hence eliminating dollar conversions, as well as linking card switch systems and linking payment messaging systems which will benefit tourists and residents.

The UAE and India have close trade and tourism ties with bilateral trade reaching $84.5 billion while Indians are top tourists to the UAE and the largest investors in the local property markets. The Indian diaspora accounts for 3.7 million of the UAE’s over 9.6 million population.

“Now, Indian importers will be able to open Letter of Credit (LC) in Indian rupees instead of US dollar which will improve the balance of payments and strengthen the South Asian currency as well. It will also help traders to earn predetermined margins by avoiding foreign exchange fluctuations. Going forward, Form 15CA and 15CB will not be required anymore, hence, all traders should start the Local Currency Settlement (LCS) mechanism with immediate effect,” said Harikishan Rankawat, chairman of The Institute of Chartered Accountants of India (ICAI) – Dubai Chapter, and managing partner of RNG Auditors.

The agreements were signed by Khaled Mohamed Balama, governor of the UAE Central Bank, and Shaktikanta Das, governor of the Reserve Bank of India.

Appreciating local currency cross-border trade agreements, Kamal Vachani, group director and partner at Al Maya Group, said this is an amazing opportunity where traders from both sides will benefit.

“The huge flow of Indian tourists will also save in their currency exchange charges and time too,” he said.

Dr Azad Moopen, founder chairman and managing director of Aster DM Healthcare, said it is remarkable to see the bilateral trade between India and UAE cross the historic $85 billion mark, with a 20 per cent growth since the signing of the Comprehensive Economic Partnership Agreement (Cepa) last year.

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