In a significant development, India is now paying for its import of gold and other commodities from the United Arab Emirates (UAE) in its national currency — Indian National Rupee (INR).
A senior Indian government official speaking on the condition of anonymity said that UAE is also using rupees for its purchases of gems and jewellery from India, Money Control reported.
This comes after Reserve Bank of India (RBI) in July 2022 decided to permit importers to make payments in rupees and exporters to receive payments in local currency.
In July 2023, the two countries signed a Memorandum of Understanding (MoU) to use their local currencies for settling bilateral transactions. The countries involved are using the special rupee vostro account, which was permitted by the RBI.
The move signifies a concerted effort to enhance economic ties between the two countries. In December 2023, India made its first-ever payment in rupees for crude oil purchased from the UAE.