India’s first rupee payment for UAE oil set to spur two-way trade boom

India’s first rupee payment for UAE oil set to spur two-way trade boom

A refinery run by the Indian Oil Corporation in Haldia, West Bengal. In the financial year 2022-23, India spent $157.5 billion on importing 232.7 million tonnes of crude oil. — AFP

Published: Tue 26 Dec 2023, 7:56 PM

India, the UAE’s second-largest trading partner, has made its first-ever payment in rupees for crude oil purchased from the Emirates, signalling what could be a paradigm shift in dollar-denominated global trade transactions while giving a game-changing fillip to the booming two-way trade that is on track to cross $100 billion mark in a couple of years.

Businesses and traders from both sides hailed the development as a very vital aspect of bilateral cooperation, paving the way for enhanced economic collaboration while making international financial interactions simpler.

Following the signing of the Comprehensive Economic Partnership Agreement (Cepa) in 2022, the UAE-India trade rose to $85 billion in 2022. The UAE emerged as India’s third-largest trading partner and second-largest export destination in FY2022-23. Conversely, India is the UAE’s second-largest trading partner.

For India, the world's third-largest energy consumer, the payment in local currency marks a historic moment in its strategic push to decouple from the ubiquitous dollar by promoting its currency globally. The move is also in line with